Self Certify Mortgages
Self Certify Mortgages | Facts on Self-Employed Home Loans
Add the growing number of self employed workers and the growing flexibility in working patterns for PAYE workers and you get an idea of how many borrowers would benefit from self certify mortgages. In fact, the problem self-employed workers or irregular earners now face is that there are simply too many self certify mortgages to choose from. But this is where an experienced mortgage broker, such as The Mortgage Broker Limited (TMBL), that arranges self certify mortgages on a daily basis, can make the difference between getting just any deal and getting the best deal.
Who are self certify mortgages aimed at?
The answer to this question is not as straightforward as some homeowners think. While specialist self certify mortgages are aimed at borrowers who work for themselves, it is usually only in the case when they have less than three years' certified accounts. If they have had their own business for more than three years - and have accounts to prove a steady and sufficient income - a mainstream mortgage can usually be acquired.
But the purpose of self certify mortgages doesn't stop there. The products are also suitable for borrowers with non-standard incomes. For example, those with two jobs or substantial undeclared earnings like annual bonuses or commission. In short, self certify mortgages are there to serve borrowers who have an irregular income - and an irregular method of earning it.
How do self certify mortgages differ to standard deals?
In the vast majority of cases, self-employed salaries fluctuate, year on year, month on month and even week on week. This can make it difficult - even impossible - to pinpoint exactly what you earn. Lenders offering self certify mortgages will therefore allow borrowers to present only an estimation of earnings for their loan. Although this figure will not be investigated or checked, it will still have to meet the lender's specific criteria across its self certify mortgages. This is another reason why it often saves time and effort to go to a broker.
What are the lending criteria for self certify mortgages then?
When it comes to qualifying for the loan, self certify mortgages are deemed to be slightly higher risk by lenders due to this irregular and perhaps more uncertain income. This can result in the borrower being asked to provide a larger deposit - usually of around 20 per cent of the property value (or 80 per cent Loan to Value). A higher interest rate is sometimes also levied on self certify mortgages, depending on your individual circumstances.
However, as self certify mortgages become more widely available in the UK, terms and conditions have gradually been relaxed. In many cases, self certify mortgages can now resemble standard deals in terms of the interest rates payable and the deposit required. 
But self certify mortgages employ the same principal as any other mortgage - that is the greater chunk of deposit you put down, the wider the range of lenders will be available to you and the better rate of interest you will pay.
How easy is it to qualify for self certify mortgages?
Once you know what you are looking for, qualifying for self certify mortgages is not difficult. The selection of self certify mortgages available is also wider than ever, which means lending terms such as borrowing limits, interest rates, tie-ins, and fees can also be more competitive. A specialist broker, such as TMBL, has knowledge in the field of self certify mortgages as well as relationships with lenders operating in the field. It can guide you through the range of self certify mortgages on the market making sure you get the best deal possible.
