Sun Bank is amending the criteria for its self-certification mortgage and will no longer offer it on an execution-only basis.
The maximum loan to value has been reduced from 85 per cent to 75 per cent for the self-employed and 70 per cent for employed applicants.
First-time buyers will no longer be eligible for self-cert. Sun Bank will continue to rely on a declaration of affordability from the applicant, verified by the mortgage adviser rather than asking for a disclosure of income.
Director Matthew Wyles says the document will require both the applicant and the adviser to confirm that they have discussed and reviewed the issue of affordability and that the application is reasonable and sensible.
Loans will have to be applied for through an adviser.
Wyles says: “The media attention that has been focused on self-cert products recently concentrated our minds and so we undertook a review of the product.
“We did find causes for concern, particularly from the employed, who have no rationale for going self-cert. These concerns are reflected in the new criteria that we have established.
“We believe that self-certification will remain a valuable option for customers with complex or multiple sources of income. Our distinctive approach to self-cert reflects the crucial importance of the intermediary in helping the applicant to approach the issue of affordability responsibly.”