Self Certified Mortgages
Is Your Income Difficult to Prove?
This may be the answer
Self-Certification mortgages originally appeared as a means to help self employed mortgage applicants gain a mortgage when they couldn't conventionally prove their annual income. Due to the ever-changing workplace, and the fact that it is now quite common place to earn irregular commission income or bonuses, work on a temporary contract or have a second or even third occupation, Self-Certified mortgages are now available to certain employed workers as well. The mortgage lender will normally require Self Certified applicants to have a minimum deposit of 25% before they will consider them for a mortgage advance. However, a small number of lenders will lend up to 80% or even 85% of the property value. You should be aware that self-certified mortgages usually attract higher interest rates in order to reflect the additional risk that the lender may be undertaking in arranging such a loan. A Self Certified mortgage allows you to declare your own expected income on the application form without having to provide the evidence that is usually required when applying for a standard mortgage. Instead of supplying the lender with bank statements, accounts or any other proof of income, the lender will carry out a credit assesment and in most cases a credit score. In certain instances, they may request an employer reference or accountant reference if the applicant is self employed. Self Certification Mortgages are sometimes available to first time buyers provided you meet the strict criteria. An independent consultancy such as James Raynor can offer you the largest choice of Self-Certification mortgage products on the market. Be aware though, as it is the obligation of the applicant to provide accurate income information. Self-Certification should never be used as a means to provide mis-leading information or over-stating your actual income. We will ask for you to provide evidence that indicates that you can afford the monthly Mortgage payments.
Why Self-Certification?
What do your accounts prove?
Many Lenders, when calculating the maximum loan for a Mortgage applicant will use either an employed clients gross earned annual income or a self-employed clients annual net profit. But in the case of the self-employed, this doesn't always give a true reflection of the health of the business. A sole trader for example might only show a small annual net profit, but this could be after substantial personal drawings throughout the year and after all allowable tax deductions have been fully utilised. Maybe you are self-employed and have only been trading for less than a two years and do not yet have any accounts prepared by your Acccounant but can evidence income and more importantly affordability using banking statements. Many regular lenders would require evidence that your business has been trading for a minimum period of 2 or 3 years with fully prepared accounts or Revenue returns, whereas many Self Certified lenders will consider much shorter trading periods. In fact some lenders do not even require you to have an accountant (provided suitable evidence can support your application), so if you fall into this category, there still may be an opportunity to arrange Mortgage finance for your dream home! Self Certified lenders have many variations to their lending terms and conditions, so if you are in any way unsure you should always seek the advice of a professional and Independent Mortgage Consultancy such as James Raynor.
What if I have 2 jobs?
what are your circumstances?
Many High Street Lenders will offer you a loan providing your 2 or more incomes are guaranteed and provable. However, if the second income is not guaranteed or varies hugely from month to month a standard Mortgage Lender may only offer a percentage of the second income when assessing your income or affordability for a loan. A Self Certified Mortgage Lender may be able to ofer a loan based on the entire income as stated.
Do they cost more?
It's a bigger risk for the Lender
A Self Certified Mortgage does ucost more than a standard Mortgage because interest rates are usually higher due to the higher perceived risk that the Lender is subject to by Lending without having verified the income of the applicant.
Can I get a fixed rate product?
You'll have a choice as normal
Self Certified Mortgage products now offer a choice almost as big as the 'High Street' in that you can often find Fixed rate products, Tracker products and even Flexible products offered by some of the niche Lenders that cater for this specialised marketplace.
Disclaimer
James Raynor is Authorised and Reulated by the FSA (463141). You may be charged a fee for the processing of your application and this fee and we estimate that this fee will be £195. Your Home is at risk if you do not keep up the repayments of a Mortgage or any other loan secured against it.
