A lender based outside the UK has pledged to provide mortgages for people who are unemployed, in direct defiance of the UK regulators.
The website for Unemployed Loans, has a slogan “no job, not a problem”, and promises to lend to those who are unemployed. The site also states that the company is based abroad, so that it isn’t restricted by UK financial regulations. It also adds that the intention is to re-introduce self-certified mortgages, which were previously dubbed ‘liar loans’.
Self-certified mortgages were previously available to borrowers who didn’t have to prove their income. Following the financial crisis, they were banned in the UK. As a result, companies in the UK are not permitted to offer this type of mortgage.
Graeme Wingate is the owner of selfcert.co.uk, which is based in Czech Republic. The company offered self-certified mortgages and within three months it had loaned out its total investment of £30 million. Wingate is now involved with another website, offering self-certified loans up to £5,000 but vows to bring back self-certified mortgages.
A statement from the Financial Conduct Authority states that taking out a mortgage from outside the UK could mean that borrowers will lose their right to fair treatment if they face difficulty with repayments. David Hollingsworth from London and Country states that there are valid reasons why lenders don’t offer loans to people who are unemployed.
CeMAP qualified mortgage advisers are able to help borrowers decide whether they can afford a mortgage, and look for alternative options.
