No Proof of Income Mortgages
What kind of lenders provide 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 nearly 5 million self-employed workers in the UK, which is an indication of the high demand for products like 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% of your earnings, like a commission that almost equates your basic salary.
Alternatively, it could be that you simply have more than one job and your income varies from month to month. In all of 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 could well 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 self cert products are perceived as a higher risk by lenders, you will have to stump up a slightly larger deposit of at least 25% of the property value. However, as no proof of income mortgages have become harder to obtain as competition in the sector has declined, we predict that self cert products will require a higher deposit in the future. A mortgage broker that specialises in the field has existing relationships with lenders that may be able to 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.
There are less lenders offering self certified no proof of income mortgages deals, but they are still out there are brokers still know how to get hold of them. It isn't easy and they will tend to say no more than they will say yes, but you still have a chance. So talk to a mortgage broker and see what has to be done for you to get a yes from a lender of no proof of income mortgages in this difficult economic world.