No Proof of Income Mortgages
No Proof of Income Mortgages - Do They Stack Up For You?
What kind of borrowers require no proof of income mortgages?
No proof of income mortgages are aimed at borrowers who do not have a straightforward or regular salary. For example, it might be that you are self-employed but do not have more than the typical three years' accounts required by a standard mortgage lender. According to the Office for National Statistics (ONS), there are more than 3 million (3,337,000) self-employed workers in the UK (Q1; 2007), which is an indication of the high demand for no proof of income mortgages.
However, it might be the case that you are not self-employed, yet your 'core' salary does not represent 100 per cent of your earnings. For example, you could earn lucrative annual bonuses through a banking job in the city, or commission that almost equates to your basic salary again if you are a hard-working sales executive or estate agent. Alternatively, it could 
be that you simply have more than job and your income varies from month to month. In all if these cases, no proof of income mortgages can provide the answer to borrowing a loan you know you can afford to repay.
How do no proof of income mortgages work?
Before mortgages were regulated by the Financial Services Authority (FSA) in November 2004, borrowers did not have to declare even any estimated salary when it came to no proof of income mortgages. Now lenders require you to submit your annual income, while this figure will not be investigated or checked, it will still have to meet the lender's specific criteria.
What are the criteria for no proof of income mortgages?
As no proof of income mortgages are perceived as a higher risk by lenders, you will
often have to stump up a slightly larger deposit of around 10 - 20 per cent of the property value.However, as no proof of income mortgages become more widely available, competition in the sector has mounted and now some no proof of income mortgages require as little as a five per cent deposit. A mortgage broker that specialises in the field, such as The Self Cert Mortgage Centre, has existing relationships with lenders that offer no proof of income mortgages and are best-placed to point you in the right direction.
Bear in mind however, that no proof of income mortgages employ the same principal as any other type of home loan; the bigger chunk of deposit you can put down, the wider the range of lenders available to you and the lower interest rate you will pay.
