Self Certification Mortgages In The UK
Self Certification Mortgages In The UK | The Pros and Cons
Self certification mortgages in the uk are designed to help borrowers who might find it hard to prove their income. Anyone who has varying levels or sources of income, or who is self employed, could benefit from considering self certification mortgages in the uk.
If you own your own company or operate as a one man band you may find it difficult to get a mainstream mortgage. This is because lenders look closely at your income and it's possible that you have minimised your earnings to reduce your tax liability. Therefore a lender may think you earn less than you actually do, but self certification mortgages in the uk were designed for people with exactly this problem.
Instead of having to prove your income to a lender, with self certification mortgages in the uk you actually state your earnings on the application, and the lender does not verify them. Because they are taking more of a lending risk by not checking your earnings the lender will require you put down a larger deposit than a mainstream borrower, typically 15% and self certification mortgages in the uk are charged at a premium. Although in the last few years the gap between interest rates on traditional high street homeloans and self certification mortgages in the uk has narrowed considerably. In addition, the lender will still conduct a credit check to ensure you are not in financial difficulties.
As well as self employed borrowers these deals are also suitable for those with varying levels of income, such as those who do seasonal work, or people whose salary is heavily based on commission.Also, people with multiple sources of income may find it hard to prove their earnings - for example, somebody 
working in two part-time jobs or receiving income from a trust fund or divorce settlement. Finally, contract workers and freelancers may also prefer not to have to prove their income.
Apart from the application process self certification mortgages in the uk work in exactly the same way as other residential mortgages. You can choose a term of repayment, usually 25 years and payments are made on a monthly basis. Many self certification mortgages in the uk are now portable, meaning that you can move the mortgage with you when you move house.
If you think self certification mortgages in the uk could benefit you, seek advice from a specialist mortgage adviser.
