Friday, January 30, 2009

Another blow to Government lending plans

Self cert mortgages face extinction

Self cert mortgages face extinction after BM Solutions and Bank of Scotland became the latest lenders to pull out of the sector. The HBOS lenders, now part of Lloyds Banking Group, will no longer accept any self cert business. Both in recent years have been large players in the self cert sector. This comes after both GE Money Home Lending brands iGroup and First National revealed they were to stop accepting new self cert business last week, and Bristol & West pulled out of new mortgage lending completely. Nationwide’s The Mortgage Works and Britannia’s Platform remain the only lenders who offer any kind of self cert mortgage.

Posted by jack c @ 04:09 PM (1557 views)
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16 thoughts on “Another blow to Government lending plans

  • so now honest self employed people are screwed…

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  • Well self-emplyed people have had it so good for so long with their liar loans.

    Not to mention the fact that none you pay any tax, all your personal costs suddenly become business expenses etc, etc.

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  • Self Employed says:

    need-a-crash needs to learn not to tar everyone one with the same brush. Plenty of honest people out there.

    Someone on this site mentioned about the BBC Money Programme on self cert mortgages a few years back. I remember watching this programme and it wasn`t the self employed inflating their wages but people in main stream work such as teachers etc.

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  • @need-a-crash – “none you pay any tax, all your personal costs suddenly become business expenses etc, etc” – I’ll take this as a Friday afternoon wind up? as what you say is not quite true bearing in mind that self employed are due to make their tax payments by tommorrow latest or face a fine !

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  • @need-a-crash – and what about people employed by others, all those lunches, office parties, bonuses etc. Get a grip.

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  • Self employed v non self employed. Hmmmm I have to declare an interest, so can comment no further.

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  • 2. need-a-crash said…”your personal costs suddenly become business expenses”

    I do recall my ex partner putting anti-fouling paint (for his yacht hull) through the estate agents business. When queried by the taxman, he claimed the shop premises were a magnet for dogs who persistently cocked their legs against the outside walls.!!!

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  • p.doff

    LOL

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  • Good news. If you are self employed you will need a couple of years accounts, but if you can’t produce them, you probably shouldn’t bother applying for a mortgage. Self Cert was always considered a contributor to the problems we now face. Let’s get back to basics of affordable borrowing including 3.5 X salaries and no more Interest only.

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  • mark wadsworth says:

    There is an easy way to reconcile this – if self-employed want to ‘certify’ their income, they have to show their submitted tax returns and statements of account from HMRC. (some banks take this sensible precaution IFAIAA). So if they’ve been claiming private expenses as business expenses, their income is correspondingly lower and they can borrow less.

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  • catching up ~~~ having been out all day, I find myself wondering how many of you posting here have actually thought this whole house ownership thing through thoroughly.

    just a thought, no offence.

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  • Honest self employed people are not screwed at all. They just need to get an accountant to certify their income.

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  • What Mark Wadsworth and jonb say.

    I’ve been on both sides of the employed / self-employed fence. It’s actually nigh impossible to claim dodgy expenses, and the sheer amount of government paperwork just piles on further stress and hassle. In the end I went back to being employed!

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  • Maybe there are alot of fools out there, but self employed have always tended to pay a premium for their mortgages.

    The other thing is that earnings are more likely to fluctuate when self employed.

    So personally I’m ok with self cert used correctly.

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  • Sorry I should add :-

    If someone decides to go self employed it’s a huge commitment to what they are doing and most (I would hope) go self employed to better themselves.

    I think it’s pretty tough to say you can’t bey a house for 2 years because you’ve gone self employed or started your own business.
    Particularly bearing in mind if that individual already had a mortgage they wouldn’t be forced to sell their house.

    How would an ‘on the cards’ employee feel if they couldn’t get a mortgage for 2 years if they changed jobs ?

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  • new user 2007 says:

    The BBC documentary highlighted many many years ago the fact that the bulk of self-certified mortgages had nothing to do with their intended use (mortgages for those who cannot provide “standard” data on their incomes i.e .businesses), but were instead advised by brokers to home buyers as a way of telling lies.

    These people are just as guilty as BTL of causing the bubble (bidding the more prudent out of the market), so my heart is not bleeding for the majority of them! The government should perhaps get involved in providing such loans, but only to those who can prove they are registered at companies house, or show whatever readily available evidence shows they are self-employed.

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