Self Certification Mortgage: An Overview

Self Certification Mortgages were introduced nearly a decade ago to help prospective home buyers who have funds for property investment but cannot demonstrate their true earnings or cannot verify their income. This may be due to a number of reasons including self employment or people who have a varying income due to commission based jobs. Self Certification Mortgage does not require borrower to provide pay slips or any other documents to prove income. This has helped a large section of the mortgage seekers who were not catered for previously.

How does a Self Certification Mortgage work?

A Self Certification Mortgage requires you to tell the lender what your income is and the mortgage loan amount that you can borrow is based on the income you have stated. Your stated income does not require any documentary evidence but you may need an accountant to back your statement. Interest rates are generally higher than other mortgage types as the risk involved for the lender is greater. Most lenders don’t offer anything above 75-80% of your property value.

Will a Self Certification Mortgage help you?

Self Cert Mortgages are tailored for self employed persons or people whose income cannot be assessed easily. If you are self employed and working as and when there is a demand for your work or services, if you are a salesperson who earns different amounts every month or someone with no accounting records due to the seasonal nature of your work – Self Certification Mortgage is the option for you.

• Freelancer?
• Seasonal Worker?
• Don’t have a standard income every month?
• Derive income from more than one source?
• Self employed for less than 3 years?
• No accounts on your income for the last 3 years?

If your situation matches with any of the above you are eligible for Self Certification Mortgage. However it is necessary to consult independent mortgage brokers to determine whether Self Cert Mortgage is the best option for you. Self Cert Mortgages might necessitate some proof of income in the form of credit checks undertaken by your lender, bank statements or references. If you own a home you maybe asked to provide your existing mortgage statements. Tenants might be asked references from their landlords.

There are plenty of online lenders offering competitive Self Cert Mortgage deals. It is necessary to speak to a professional financial advisor to examine whether or not Self Certification Mortgages are suitable for your individual needs. It is a good idea to take some time to compare quotes from several lenders and choosing one which suits your budget and your needs.