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Self cert mortgages and non-status mortgages
What does self cert, self certified or self certification actually mean?
If you are self- employed, you may simply not be able to prove your income in
a form acceptable to a
mortgage
lender. An example could be no formal or recent accounts or accounts prepared by
someone without the prescribed qualifications. You may also be an employed or
self-employed person who has some buy to let
or investment properties.
Whilst originally intended for the self- employed, the self cert concept has
been extended to incorporate the employed market. For example, those who derive
a large proportion of income from non-guaranteed sources such as bonuses,
commissions and other allowances. A self-certification mortgage is ideal in this
situation, as the lender will normally allow 100% of such income into the
affordability calculation.
Traditionally, most high street mortgage lenders have taken a cautious view of
the self-employed or others who find it difficult to confirm their income.
Moreover, fluctuating bonuses or commissions might not be considered as
permanent income and excluded from the affordability calculation altogether. A
self cert mortgage provides a solution to this problem.
Lenders that operate in the self-certification mortgage market will use a
similar method of underwriting to the mainstream lenders. However, as they do
not ask a potential borrower to prove income, a slightly larger deposit is
required to reduce the perceived risk from a lenders perspective. In all cases,
it is essential that the borrower can afford to service the mortgage loan on an
ongoing basis.
We know which lenders will accept your self cert circumstances, who offers the best self cert mortgage rates and who will provide the quickest self cert mortgage service.
Contact us today to discuss how we can help or complete our mortgage enquiry form.
Self certification mortgages mean that you do not have to prove your income. You will therefore need to be sure that you can afford the repayments on the new loan out of your actual income.