Self Certifying Mortgages
Self Certifying Mortgages | Maybe You Have Missed Your Best Chance
The real mortgage situation
Things are tight for lenders, the media certainly hasn't over-exaggerated that fact. Lenders have to borrow the money they are going to lend themselves from somewhere, and unfortunately thanks to so many people defaulting on their US self certifying mortgages, world credit is more expensive. Markets are dipping, inflation is rising and the boom has ended. So lending to UK borrowers is more expensive and riskier for UK lenders. But that doesn't mean mortgage lending in the UK, even self certifying mortgages in the UK, has stopped dead, it's just slowed down.
Are self certifying mortgages the lenders' new nightmare?
Nightmare is certainly an exaggeration, but self certifying mortgages are now much riskier propositions. Because the lenders have spent more money, and their profits are lower, they are more pessimistic towards self certifying mortgages borrowers who cannot prove their income. To make money again, and to get the world finance markets back on their feet, lenders have to have water-tight books containing mortgages that are paid up in full every month. To lend hundreds of thousands of pounds' worth of self certifying mortgages to people who have no proof of income will fill them with trepidation - trepidation they don't need after losing billions as a result of the US crash.
So have I missed the boat?
No, self certifying mortgages are not dead, they are just now treated with kid gloves. Lenders are fearful, but they are also hungry to build up their profit margins - and they know there are still a lot of self cert borrowers in the UK with a lot of money to spend.It's not a question of saying no to all self certifying mortgages, it's just a matter of being a little more cautious when lending their money. The whole reason for the US sub prime crash is that self cert lenders gave out self certifying mortgages to anybody and everybody - they did not practice sensible lending.
Where you can look
So there are still self certifying mortgages out there for you to take advantage of, it's just a matter of looking for them. That's where a broker comes in - there are less mortgages on the market, but brokers know there are still thousands to choose from, even from self certifying mortgages lenders.
What are the lending criteria for self certifying mortgages?
The credit crunch is a real deal, and it is going to leave a lot of people out of pocket. And it's your job to avoid the crunch, and you can with self certifying mortgages. Just be sensible - have a plan, know your situation and be ready for any eventualities. Self certifying mortgages are still a great option at this time of heightened worries and tightened margins - and there are still plenty of chances to make the most of them.
