First time buyer? Lie about your income!
I was listening again to BBC’s File on Four radio programme which had a story on how first time buyers are being encouraged to lie about their income in order to get a mortgage big enough for their first home. It’s repeated on the 30th September at 5pm on Radio 4 and I would really recommend listening to find out exactly how the rises in the housing market has pushed some first time buyers to the brink.
The scam is done by inappropriately issuing self-certification mortgages where the buyer just states an income. Unscrupulous brokers then don’t check on the income but manage to pass the mortgage.
One borrower whose real income was £25,000 told how he was advised to double that on his mortgage application. The plan worked and he was left with a loan of more than £200,000 stretching his income to it’s absolute limit.
The FSA needs to step in to stop this deception but that doesn’t get to the real root of the problem - we need a serious answer to how people can be expected to purchase starter homes with average house prices soaring over £180,000.