Self Cert Mortgages
Homebuyers in the past who had a hard time showing exactly how much money they made with pay slips often found that getting a mortgage was difficult. Many high street lenders would deny loans to these people. Those who would accept them would only offer them a small mortgage, which was not enough to buy the home.
If you are in this situation, you now have another option. Self-certification mortgages allow those who are self-employed, receive income from tips or commissions, or otherwise find it difficult to prove their income to get a mortgage with income verification documentation. A self-certification mortgage allows you to simply state how much money you make. Your income is not checked, and you do not have to prove your employment in any way.
Who Can Get Self Certification Mortgages?
Anyone can get a self-certification mortgage if they cannot prove their income in the traditional manner. Self-employed individuals often apply for this type of mortgage. However, those who work seasonal jobs, are paid through investments or pensions, have more than one income, are paid on commissions, or receive a large bonus to supplement their incomes can benefit from self certification mortgages.
Interest Rates with Self Certification Mortgages
Because you are stating your income verbally and cannot prove it, you may find that a few lenders will charge a slightly higher interest rate for self-certification mortgages. However, recent statistics have shown that those with self-certification mortgages have no more repossessions than those with traditional mortgages, so this trend is decreasing as lenders are recognizing that self-certification mortgages do not pose a higher risk. Today you can get a very competitive rate on your mortgage, even if you cannot prove your income.
Getting a Self Certification Mortgage
The process of applying for a self-certification mortgage is the same as applying for a traditional mortgage. You will still need to decide which repayment structure you want. You will also want to take a look at different interest schemes to choose the most favourable one.
Self-certification mortgages have one major difference when compared with traditional mortgages. When shopping for a self-certification mortgage you may be forced to use an independent broker. Many lenders who specialize in this type of mortgage do not sell directly to consumers but only work through brokers. This is not a bad situation, though, because brokers are able to compare different mortgage offerings much easier than you can as a consumer working alone, so working with a broker will actually help you find the best self certification mortgage with the most affordable terms.