Self certification mortgages: A self employed designer deal?
The term self certification mortgages is becoming increasingly common these days as homeowners become more flexible in their working lives and more savvy about the different mortgage options available to them. But, while it’s a positive that borrowers are taking more control of their financial affairs, there is also a danger that they apply for self certification mortgages without being fully equipped with the information they need to get the best deal. This is where The Mortgage Broker Limited (TMBL) – a broker that arranges self certification mortgages on a daily basis, can point borrowers in the right direction from the word ‘go’.
When would self certification mortgages be suitable?
In short, self certification mortgages are suitable for borrowers who, for one of a number of reasons, do not have a straightforward or regular salary. For example, self-employed borrowers who cannot put their hands on three or more years of certified accounts. If three years’ accounts are available, self certification mortgages are not usually required and standard mortgage deals can be sought. With more than 3 million (3,337,000) self-employed workers in the
Who else needs self certification mortgages?
It might be that you are not self-employed, yet your basic salary still does not represent your total earnings, in which case self certification mortgages could also present the right option for you. For example, you could receive dividends through shares in a company, large annual bonuses through a banking job in the city, or a significant part of your salary could be made up of commission, as is the case with an estate agent, recruitment consultant or sales manager. And self certification mortgages would also be suited to those borrowers who derive income from more than job or earn extra cash from home; this could be doing anything from stuffing envelopes to child-minding.
Why are self certification mortgages so important?
The average house prices has seen a 179 per cent increase in the past 10 years – from £70,000 at the end to 1997 to £157,039 in December 2007, according to figures from Halifax. This means borrowers need all the borrowing capacity achievable, whether to make the first rung of the property ladder or, indeed, to climb up to the next one. So self certification mortgages enable borrowers to use every penny of their earnings, regardless of where from, in order to achieve this.
How do self certification mortgages differ from regular mortgages?
Since all mortgages were regulated by the Financial Services Authority (FSA) in November 2004, lenders that offer self certification mortgages will want to see proof of your income – or even additional income – in order to lend. Although self certification mortgages come with greater flexibility, providers will still balance their risk by requiring a more significant chunk of deposit than would apply to a standard loan; usually a minimum of 20 per cent of the property value opposed to five per cent on a standard deal. However, some self certification mortgages require as little as five per cent providing your credit rating is impeccable and salary robust enough.
Getting more help with self certification mortgages
