A Self Cert Mortgage is designed for individuals who cannot prove or justify their income to a mortgage lender. Some examples of individuals who qualify may include people who have no formal accounts or who have had their accounts done by a person who is not qualified or not licensed. A person who may not be working but has some buy to let properties may also take out a self cert loan. Similarly, people who are self-employed or who earn their living on a the basis of commission may be considered for a self cert mortgage. The rise of the self cert mortgage loan and lenders started in 1982 when the UK mortgage market was deregulated and many lenders came up with many strategies employed to attract borrowers. The main and biggest advantage point of the self cert mortgage is that borrowers are not forced to prove their salaries, but the disadvantages are the high interest rates are higher as compared to normal mortgages and the loan to value ration is lower.
Although self cert mortgages were designed for those who are self-employed, those who are employed by companies can also make use of this option if, for example, their income is made up of commissions, bonuses, and other forms of allowances. A lot of traditional mortgage brokers have taken a very cautious view on individuals who are self employed, as well as those others who cannot really confirm their income. They believe that bonuses and commissions may not be considered stable and cannot be used in computation for a loan. Specialist self cert mortgage lenders look past these items by asking the potential borrower for a large deposit. This deposit is required since they do not force the borrower to prove their income, but it is used to reduce the perceived risk from a lenders standpoint. In the end, it is important that the borrower can afford to pay off the loan on an ongoing basis.
If you're interested in finding out more about self cert mortgages, take a moment to fill out our short self cert mortgage form and we will connect you with a broker from the SimplyFinance network. This broker will answer any questions you may have about self cert mortgages, and they'll be able to search the market to find the best self cert mortgage deal for you.