Fixed Rate Self Certification Mortgage
Fixed Rate Self Certification Mortgage or Tracker?
Currently millions of Brits are coming to the end of their fixed rates, including fixed rate self certification mortgage customers - and they are in for a shock. As little as two years ago the fixed rates in the UK were very low, and many homeowners got hold of cheap deals as a result. But now rates have shot up in the face of tighter credit, and the base rate, which dictates the trackers, has also been rising over the last few years. So whatever you choose, be it a fixed rate self certification mortgage or a tracker, things are going to be harder than they once were.
What does the fixed rate tag mean?
Recently, the Bank of England slashed the Base Rate to 5% in an attempt to curb inflation. This was good news for all tracker customers, but it's also not bad news for fixed rate mortgage customers - any rate dip is good for mortgages. But if this trend continues, and it might as US faces a recession, self certification trackers could be the best choice for homeowners who cannot prove their income.
But then again, tracker rates can be risky - no one knows what is going to happen in the next few years. It's bad enough guessing what is going to happen to your earnings - those who have their own businesses, those relying on bonuses, or even freelancers who live from job to job - self cert trackers are riskier than fixed rate self certification mortgage loans, so self cert borrowers are doubling their risks with trackers.
Fixed - get them cheaper while you can
So if trackers seem too much of a long bet, then fixed rate self certification mortgage products might be the right choice. Self cert fixes are pricier than regular mortgages but you don't need to prove your income and you can afford a bigger, better loan with them. Also, with all the risk inherent with people who can't prove their income, fixed rate self certification mortgage is a safe bet. You know what you are getting and you can predict the future a lot easier, which is key when applying for self cert.
But if the Bank of England continues to cut rates, a pricier fixed rate self certification mortgage may not seem as great. Also, every penny counts if you are self employed or have more than one job, so spending more on a fixed rate self cert mortgage deal will hurt every time the bill hits the doormat. If you are used to taking risks, maybe the tracker is a better self cert deal. Fixed rate self certification mortgage borrowers are those who want to stay safe.
If you still can't decide on your self cert future, talk to a broker. A broker can take a look at your situation and decide on a fixed rate self certification mortgage or tracker self certification mortgage. And a broker has seen every type of borrower so will know what is best for you. But whichever you plump for - fixed rate self certification mortgage or tracker mortgage - you know as a self cert customer you will be getting a great deal.
