True Self Cert Mortgages
Why You Will Never See True Self Cert Mortgages Again
A few years ago, true self cert mortgages meant lenders didn't ask the borrower for any proof of income. They simply ask them to sign a declaration stating their salary that they took as truth. While some self cert mortgages might ask to see some proof of income in the form of payslips, audited accounts or bank statements, true self cert mortgages didn't ask for any earnings documentation to support the mortgage application.
At the time this may have been feasible - money was easy to get hold of, house prices were on the up and everyone was making money. But the wheels had to grind to a halt at some point, and it was true self cert mortgages that acted as the stick in the spokes. All of a sudden a lot of people who had said they could afford a mortgage, especially in the USA, couldn't. So lots of people went into repossession and lots and lots of debts around the world began to default. Banks lost billions and stopped lending to each other. The world economy froze and most of the Western world went into a recession. So although true self cert mortgages were not the main reason for the situation we find ourselves in now, they were the catalyst.
It is reasonable to assume that true self cert mortgages will never return to the UK mortgage market. Lenders now see the folly in offering mortgages to people without ever asking for proof that they can pay it back. From now on, lenders will want to see past records and statements to show that you have handled debt and earned enough money to cover a mortgage, they will not just take your word as they did with true self cert mortgages. It's sensible lending, and lending that will not cause another global meltdown.
If you in the past had to use true self cert mortgages as a means to finance your home, you will have to look for alternatives. That means putting together all the evidence you have that you can afford a mortgage - that's bank statements, credit references, account's letters, audited accounts. And crucially, in this world where true self cert mortgages are impossible, you need to get some professional mortgage advice. A professional adviser will help you get your finances in order and get hold of some safe and flexible mortgage deals.
