Best Mortgage Deals
Advice, help, information and guidance on the best mortgage deals available

Self Cert Mortgages

best mortgage deals by AnnaLet's start with a self cert, and for those of you who have never come across this type of mortgage, don't worry - I have one myself so speak from personal experience, and for the self employed they can offer one of the best mortgage deals ( and sometime the only mortgage deals) available! Being self employed has advantages, but it can have disadvantages when it comes to borrowing money, and a self cert mortgage may be the only option.

Best Mortgage Deals - Self Cert Mortgages

Self cert mortgages are exactly that - you certify your own earnings yourself, rather than having to supply the lender with the usual information on tax returns, salary and wage slips, and assets and liabilities statements. Typically they are used where your income may fluctuate for example with commissions in sales, or perhaps your business or work is seasonal. Maybe you have income from rentals, overtime, or part time jobs. Whatever the reason a self cert mortgage provides an option where income is difficult to prove or if it varies during the year. The basic concept of the self certification mortgage is that it is a device that allows mortgage lenders to put together a set of criteria that will allow them to give mortgage loans to self-employed people. Apart from the self-employed, people who work on contract or are paid a large percentage of their income in bonuses or commissions have also traditionally been discriminated against by mortgage lenders. The self certification mortgage also you to overcome the proof of income barrier to entry into the property market.

However, before you rush off and apply for one, please remember that you still have to meet the repayments. So if you are considering a self cert, just because you have been rejected elsewhere - DON'T. Self cert mortgages are for those people who know they can afford the repayments, but also know that a bank would not provide the loan, purely because your earning are erratic or variable. For many self employed and even company directors, bonuses may not be guaranteed , and in addition are often paid at year end. Convincing a bank that you can afford the repayments in these cases is very hard - trust me I know.!

Best Mortgage Deals - Lending Criteria

Are all self cert mortgages truly self cert - the answer is NO. In many cases, even though the lender calls them self cert, they will still do checks so please don't think otherwise. Mine didn't, but they are the exception and not the rule.

Most lenders will supplement the information you give them with credit searches. If you are a home owner, you will be asked to supply your existing mortgage statements, and if you are renting the mortgage lender will ask for a reference from your landlord. Self cert mortgage products have limits and most self cert mortgage lenders will only allow you to prove your income in this way if you want to borrow less than 85% of the value of the property , so you will need to put down a substantial deposit, often as much as 25%. There are some self cert mortgage lenders that will now lend up to 90% , although these lenders normally charge a much higher interest rate compared to others in the market, and generally are not the best mortgage deals. They are also few and far between.

Because a self cert mortgage is considered to be something of a niche product, finding the best mortgage deals can be difficult. They are available, but in the current climate, not as widely as they used to be for obvious reasons, so you will have to shop around. Please also remember that in general you will have to pay a larger deposit. You will be able to find both interest only and repayment options, and on each page I will be adding the latest deals as they become available.

Now let's look at mortgages available for first time buyers and the best mortgage deals available.

 

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