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IFAs see sharp rise in loans for self-employed

IFAs are seeing a surge in the number of self-employed clients wanting mortgages, according to spec- ialist lender The Mortgage Business.

The company&#39s research found 69 per cent of advi-sers had seen a marked rise in demand for mortgages which allow customers to prove or self-cer- tify their income.

TMB says the rise in demand is being fuelled by the growing number of people who work on contracts or who opt to become self-employed.

But it says that, des-pite the increasing demand, many self-employed people find it difficult to get a mortgage.

TMB also claims meeting the demand for the self- employed is being hampered by the fact that some would-be borrowers&#39 companies have not been trading long enough to have the audited accounts which many high-street lend-ers require before granting a mortgage.

The research also shows that four out of five brok-ers believe credit scoring is a poor way of under-writing self-certification mortgages.

Managing director Bill Dudgeon says: “The market for people wanting to self-certify their income is growing. Many customers think this sort of mortgage is too good to be true. But the key to this market is managing risk by individually underwriting all cases instead of credit scoring. We have been doing this sort of underwriting for 11 years.”

TMB&#39s research involved a phone poll of 100 brokers in September.

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