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| What is a Self Certification Mortgage? |
| Also known as Non-Status Mortgages, Self-Cert Mortgages, Self Certified Mortgages, Fast Track Mortgages, No Check Mortgages |
| A Self Certification Mortgage is a mortgage where you declare (certify) your income level. You do not have to provide the usual documentation so you don't have to provide payslips or accountants' statements to prove your income. |
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| Why do we need Self Certification Mortgages? |
| Self Certification Mortgages are designed for anyone who has difficulty providing proof of income. Irregular work patterns, lack of accounting records, bonuses, commission and other seasonal pay can make it difficult to guarantee the income necessary to secure a conventional mortgage. Self employed people traditionally have had difficulty getting a mortgage loan from the high street lenders due to an unstable income or lack of a suitable 3 year income history in the form of audited accounts. |
| This type of mortgage was designed as a realistic option for such situations. |
| With Self Certification mortgages there is no need to supply employer statements, accounts, bank statements or any other proof of income. The Self Certification mortgage lender will however take up some appropriate references such as accountant's letter, bank and lender references, credit checks, solicitor's confirmation of previous ownership and landlord's reference. |
| Who now might a Self Certification Mortgage suit? |
| Self Certification Mortgages are ideal for the self employed who have not been in business for the 3 years or who cannot produce audited accounts for the last 3 years. |
| Self Certification Mortgages are suitable for applicants whose income fluctuates, like sales employees on a low basic wage with substantial commission payments or irregular bonus payments. Anything that makes it difficult to establish an exact income for the year such as: |
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Seasonal worker perhaps in the tourist industry |
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Contract worker with successive short term contracts such as in the computer industry |
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Limited Company Owners or Directors where income is mainly derived from dividends |
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People with multiple income streams may find it difficult to prove their total income |
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| Self Certification Mortgages can also be suitable for professionals who may have started on a low salary but income is rising rapidly |
| Self Certification Mortgages may also suit people just starting out in a new career with good steady income |
| Do you have to be Self Employed to get a Self Certification Mortgage? |
| No - you can apply if you are employed or self employed. |
| Do Self Certification Mortgages cost more? |
| Interest rates charged are now far more competitive. The interest rate on Self Certification Mortgages is likely to be slightly higher than normal rates. This reflects the mortgage lender's extra risk and costs involved in Self Certification Mortgages. |
| The interest premium on a Self Certification Mortgage may be eliminated by people who can show they are a low risk case such as |
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Having good credit history |
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Can show a consistent level of regular income |
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| Better mortgage rates may be available to self-employed people who can demonstrate consistent past and expected income levels. |
| Standard mortgage interest rates may be given for Self Certification Mortgage if you are able to put down a higher deposit. |
| How much is available on a Mortgage using Self Certification? |
| Typically deposits in the region of 20% of the value are required but some Self Certification Mortgages are available for up to 90% loan to value. |
| For the self-employed mortgages may be available for up to 100% of the loan value with 2 years of accounts. |
| Self Certification Mortgage lenders will usually lend up to three and a half times single income or two and three quarter times joint income. With a deposit of 25% or more a loan of up to five times your earnings may be available. |
| Beware: Some people have tended to exaggerate their income to borrow higher amounts under a Self Certification Mortgage. Lenders do check your requirements but it is possible to borrow more than you can actually afford which can lead to severe financial difficulties down the line if interest rates rise. Your home may be repossessed if you do not keep up payments on you mortgage. We recommended that you are realistic about your income levels. |
| What types of Mortgage are available on a Self Certification basis? |
| All types of mortgages - Variable Rates, Fixed Rates, Capped, Discount Mortgages, Tracker and so on, are available on a Self Certification Basis. |
| Flexible Self Certification Mortgages may allow lump sums over the mortgage period to repay all or part of the mortgage early. They may also allow underpayments and payment holidays and even the option to draw down additional amounts for those times when income is not available. |
| Are Self Certification Mortgages available to First Time Buyers? |
| Yes but not from all lenders. Some lenders may ask for higher deposits. |
| Are Self Certification Mortgages freely available? |
| There are a number of competitive Self Certification Mortgage available depending on your circumstances and individual requirements. Self Certification Mortgages are now supported by an ever increasing number of mainstream as well as the specialist mortgage lenders. Some of these Mortgages are only available through specialist brokers such as us. |
| Self Certification Mortgage are independent mortgage brokers and we specialise in supplying Self Certification Mortgages completely FREE of broker fees |
