Self Certificate Mortgages
Self Certificate Mortgages – What You Now Need
It may sound strange being able to take out a mortgage without having to produce proof of income, but it's true. Self certificate mortgages don't require borrowers to produce their monthly income payslips. Simply because millions of Brit cannot do that – they are self employed, they have two jobs, they rely on bonuses or they work off commission. This doesn’t mean they don’t earn enough money to get a mortgage, they just can’t show definite evidence – but self certificate mortgages can help.
In the past, the mortgage lender would take a declaration of your income on trust and ‘underwrite’ the mortgage according to what you can afford. It used to be that simple - with self certificate mortgages the only requirement was for you to give an honest declaration of how much you can afford. But lenders now only want to lend secure loans that they know will be redeemed. So someone who is trying to self certify themself will have to show that they can borrow well.
This means, firstly, having cleaner than clean credit scores is essential when aiming for self certificate mortgages. Go online and see how yours fares – any misdemeanours in your financial past could mean you are not accepted for a loan today. Sometimes these can be amended, or explanatory notes can accompany them, so it pays to take good care of your score.
You will also have to show all your documentation, from bank statements to accountant’s notes and company accounts to have any chance of self certificate mortgages. Everything that can prove that you have money coming in, regularly and of an amount that would mean you can comfortably afford your loan from the self certificate mortgages provider.
Regardless of what you need to be sure of the mortgage, you always have to remember that choosing the right mortgage is the same whatever type of product you need. Interest rate is important, especially with self certificate mortgages where the rate tends to be slightly higher than conventional loans, but it's not the be all and end all. Application fees, early repayment charges and exit fees should always be considered, as well as the terms, the standard variable rates and the caveats.
Buying a house is a massive financial commitment but thanks to self certificate mortgages it's an option that's open to many different types of people - even those that can't prove their income. It just takes more work in this mortgage downturn, and it takes a borrower that is as careful with his or her financial documentation as he or she is with their money. But with some care and a lot of professional advice there is no reason why self certificate mortgages are not still a real option.
