No self cert mortgage lending

A growing number of people are buying houses with the help of interest-only mortgages.

The FSA has issued a set of restrictions on overabundant mortgage lending which is causing a financial mess in the country. FSA claims its major aim is to ensure that mortgages are given only to those customers who can prove their repayment ability. In other words, the lenders should be aware of a borrower's financial situation and no self-certification mortgages should be allowed.

According to the FSA, self cert loans, in which borrowers don’t have to prove their income, constituted about 43% of all mortgage lending over the course of the first quarter of the current year.

The new regulations that are about to come into force will not let a large number of consumers to plunge into debt through their strong desire to buy a home.
The UK financial watchdog has discovered that nearly 50 per cent of families have a lack of financial means left after they had made their monthly mortgage repayment and had paid for living costs.

Apart from that, FSA said the new rules set out by this organization would provide vulnerable categories of customers with bad credit history with an additional protection.

The FSA is open for further suggestions from industry groups and consumers until 16 November 2010. The new rules will start operating in the beginning of 2011.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.