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Assessing affordability and suitability

With the FSA set to review approximately 11,300 small intermediary firms as part of a three year regional assessment programme, make sure your TCF record-keeping measures up. As part of TCF Outcome 4 (suitability) you need to be able to demonstrate through your records that:

• your customer can afford any mortgage you recommend (whether Full Status or Self Certification) – for the life of the loan
• the recommended product is suitable for the customer based on their needs and attitude to risk
• the product chosen was the most suitable from the available options

AffordabilityThe questions you ask and the information you record at the Fact Find stage are crucial for properly assessing affordability. You can use TCF Info’s Fact Find Checklist to check whether your current Fact Find measures up and to plug gaps where needed.

SuitabilityIn order to evidence TCF during the advice process you also need to record the reasons for the final product recommendation. Use TCF Info’s Product Suitability Checklist to check whether you’re asking the right questions and recording information properly.

The above records will make up part of your ‘qualitative MI’.