Self Cert Mortgage
Self Cert Mortgage - Do Your Circumstances Stack Up For Approval
The first, and one of the most common reasons for being self cert and having to opt for a self cert mortgage is because someone is self-employed. They have their own business and do not pay themselves a regular monthly salary. Mortgage lenders do not like this because the lack of a regular, documented and secure income means there is a risk that the borrower will not pay their mortgage. This is why a self cert mortgage is harder to get hold of.
It might be however that you are not self-employed, yet your basic salary still does not represent your total earnings, in which case a self cert mortgage is still applicable. For example, you could receive dividends through shares in a company, large bonuses through a banking job in the city, or a significant part of your salary could be made up of commission, as is the case with an estate agent or advertising sales executive. It could be that you simply have more than one job or moonlight from home, earning extra cash doing anything from stuffing envelopes to making wedding cakes.
In any case, with the average house price now at £147,746 according to statistics from Nationwide Building Society (February 2009), people need all the borrowing capacity they can get their hands on to make either the first rung of the property ladder or climb up to the next one. A self cert mortgage enables borrowers to use every part of their earnings in order to achieve this.
Although a self cert mortgage will be more flexible in what it will lend, as this is the nature of the loan, lenders will balance their 'risk see-saw' by requiring a bigger deposit than would apply to a standard loan; a self cert mortgage usually requires a minimum of 25% of the property value.
Once borrowers fit the lenders’ criteria, getting a self cert mortgage is no harder then getting a standard mortgage - especially if you use a mortgage broker that specialises in the field. Due to increasing consumer demand and flexible working patterns, 2008 saw the self cert market 'shrink' due to the credit crisis that engulfed the world. There are still lenders offering self cert mortgage deals though, it’s just a matter of finding the right professional adviser to help you source them.
