Self Certification Mortgage Broker
Self Certification Mortgage Broker | Why Would You Need One?
What is self certification?
Self-certification is basically a method of borrowing what you can afford to repay, even though you have no fixed or PAYE income to prove it - for example, you are self employed. You will need this type of mortgage, which is most commonly sourced through a self certification mortgage broker, if you have less than three years worth of certified business accounts and therefore cannot prove a benchmark of earnings or the type of security that a mainstream lender is looking for.
Self certification is also relevant for people with more than one job or with a high level of undeclared earnings like bonuses or commission. So a banker or estate agent for example, could also benefit from a self certification mortgage broker.
Why do I need a self certification mortgage broker?
Because of the increasing flexibility of working patterns in the UK, coupled with the rise in self-employment, there is now a wide choice of self certification lenders - and hundreds of self certification mortgage products - to choose from. But criteria vary considerably so a self certification mortgage broker is crucial if you want to ensure you get the best deal.
What can a self certification mortgage broker actually do for me?
The rise of price comparison websites can tempt borrowers into trying to source the best mortgage deal without the help of a self certification mortgage broker. While this approach can be successful when applying for a vanilla-flavoured, perfectly standard mortgage deal, self certification works much more on a case-by-case basis and carries far more variables and complexities.
A self certification mortgage broker has experience of lenders' quirks and preferences in the field and will therefore know immediately where to place your specific application for the best results. A self certification mortgage broker also has relationships with self cert lenders that can serve in 'pushing' your application along. What's more, a self certification mortgage broker has access to the best interest rates and mortgage terms than you could secure going direct to a lender.
What will I need to prepare before visiting a self certification mortgage broker?
You should bring to your self certification mortgage broker as much evidence as possible of your income. Since mortgages were regulated by the Financial Services Authority (FSA) in 2004, your self certification mortgage broker will at least have to declare an income to the lender, though it won't be investigated.
As well as a valuation of the house you want to buy or remortgage, you will also need to give your self certification mortgage broker a benchmark of what deposit you are able to put down. Self cert borrowers may have to put down a larger deposit of around 20 per cent of the property value as they are deemed as higher risk by lenders. However a self certification mortgage broker can now arrange a deal that requires as little as five per cent in the right circumstances.
