Self Certificated Mortgage
Self Certificated Mortgage | Is It Just Like Any Other Mortgage?
A self certificated mortgage is just like any other type of mortgage product. The only difference is that when it comes for applying for the loan you won't be expected to dig out copies of your pay slips, audited accounts or work contracts. That's because with a self certificated mortgage there is no requirement to prove your income. So if you aren't able to get hold of these documents, then it's no problem.
It may sound an unusual setup but self certificated mortgage lenders understand that not everybody is able to prove their income. There are a variety of reasons for this but the end result is being able to get a mortgage and buy a property without any hassles. Although traditionally mortgages were "underwritten" on the basis of borrowers' income, nowadays many products (including self certificated mortgage deals) are granted on the basis of your individual affordability. This means that the lender works out what you can afford to borrow - and repay of course - on a variety of factors, including but not limited to your income. A self certificated mortgage lender will use affordability to calculate how much you can afford to borrow but instead of expecting you to provide proof of income they will only ask you to declare how much you earn and how much you can afford to borrow. So as long as your credit history is to their satisfaction, and the income you're stated is honest, there is no reason why you shouldn't be able to get that self certificated mortgage and get on the property ladder.
So, if it's that easy why isn't everyone doing it? The fact is that self certificated mortgage products are only for people that can't prove their income. The reasons for this can vary widely. Classic self certificated mortgage borrowers are those that are self employed. They may own their own business or work for themselves on a freelance or contractual basis. These types of self certificated mortgage borrowers can't prove their income because it fluctuates from month to month or is seasonal
Other people that might benefit from self certificated mortgage products are those with more than one income stream. For example, someone that has an extra job but wants all their income to be used to calculate their affordability. In addition, people whose basic income is supplemented by bonuses or commission could be eligible for a self certificated mortgage. As with other mortgages, self certificated mortgage deals are available in many shapes and sizes. A mortgage broker will be able to show you all the deals available and help you find the best one for you. But before making an appointment it's worth thinking about the amount you need to borrow, how long you want to pay it back, and how you want the interest to be calculated. Other factors to bear in mind include whether you need to make overpayments, take payment breaks or even pay the whole loan off early.
There's a lot to consider. But at least with a self certificated mortgage you can rest easy that you won't be expected to provide proof of income. So your circumstances won't stop you getting that mortgage and getting on the property ladder.
