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Savills in self-cert warning

Brokers and lenders benefit from the higher margins available on self-certification products but borrowers are usually better off with a mainstream loan, says mortgage IFA Savills.

The Council of Mortgage Lenders says it would be foolish not to acknowledge that a client might exaggerate their income to get a bigger loan.

The Mortgage Code Compliance Board says self-cert should not be recommended where affordability is an issue.

Holden Meehan mortgage manager Steve Smith says where requirements such as proof of income are reduced, there is more chance of people trying to bend the rules. But he says this will be more difficult if the FSA proposal in CP146 forcing an adviser to provide a proof of affordability becomes a rule in 2004.

Savills Private Finance associate director Simon Jones says: “A proper evaluation of peoples&#39 circumstances should be carried out rather than pigeonhole them as self-cert. Brokers and lenders win from higher margins all round but it would be better if they did extra work and packaged it properly.”

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