Self Cert Remortgage
Self Cert Remortgage - The Easy Way To Find The Best Deals
How does remortgaging work?
Providing you are meeting the regular repayments on your current mortgage, the lender will not need to know each time you change your job, net a salary increase or land a promotion. However, when it comes to switching deals, your mortgage will effectively be underwritten again from scratch, so you will need to 'requalify' for the associated criteria.
Why would I need a self cert remortgage?
Frustratingly, it might be case that - despite the fact you are perfectly capable of meeting the mortgage repayments - you will be turned down for the new loan, even if it is the same size. This is often connected with a change in circumstances, for example you have gone part time to bring up children or have decided to start working for yourself. Taking a self cert remortgage means the lender will look at your overall affordability rather than just your stated salary. In other words, the reason you know you can afford the new loan.
Why else would I need a self cert remortgage?
A self cert remortgage is also suitable if you now earn extra income that you want to put towards boosting your borrowing capacity. For example, it could be that you are upsizing properties as a result of an expanding family or even that you are staying put in your current home but want to release equity to build a 'work-from-home' office.
Additional income could be in the form of an annual work bonus, returns on investments, dividends from shares or even from a second job - anything that does not constitute a basic salary that standard remortgage products require.
Bear in mind that, since mortgages were regulated by the Financial Services Authority (FSA) in November 2004, self cert lenders will want to see proof of this extra income before you will qualify for self cert remortgage. However, borrowers applying for a self cert remortgage will still be regarded as a greater risk compared to mainstream borrowers so traditionally, lenders required a minimum deposit of 20% of the property value. But, in an increasingly-competitive market place, there are now lenders that will consider a self cert remortgage with only a 5% deposit.
How common is it to opt for a self cert remortgage?
Remortgaging currently accounts for 34% of all lending (Source: Council of Mortgage Lenders, June 2007). Although there is no record of the proportion of this lending that is on a self cert remortgage basis, there are more than 3 million (3,337,000) self-employed workers in the UK (Q1 2007) and numbers are steadily growing. This means the path to a self cert remortgage is already well-beaten - you a specialist broker to steer you in the right direction.
