A Self-Certification mortgage is a mortgage designed for people who are unable to provide proof of income. This type of mortgage was originally designed for the self employed who historically experienced difficulty obtaining a loan with 'high street' lenders due to not having audited accounts available.
If you are unable to show your earnings due to being self-employed, a seasonal wage earner, or anyone with irregular earnings such as a contract worker or commission-based employee, or in salaried employment with a supplementary source of income, an unsalaried company director, or varying other reasons - a Self-Certification mortgage could be the best option for you.
Self-certification mortgages allow borrowers to certify their own earnings without having to supply documentation, such as payslips. With a self-certification mortgage you declare what your income is but generally you do not need to provide any proof. You can apply if you are employed or self employed.
Self-Certification mortgages have also found favour with salespeople and other workers who receive a high proportion of their income as commission or bonus. Even though you may have achieved high earnings this way for years, commission or bonus may still not be considered in calculations by high street lenders.
Self-certification can also be suitable for professionals who often start on a low salary, but whose incomes can rise rapidly.
Self-certification mortgages are suitable for applicants whose income is not easily verifiable, like the self-employed or those that receive commissions. If you're self-employed, a contractor, have irregular income or multiple jobs, you are probably one of many who know you can afford a mortgage but have difficulty proving your income.
Self-certification mortgages are also quite good for people just starting out in a new career with good steady income and a fair amount of deposit behind them.
Self-certification mortgages are ideal for self employed people who perhaps have not been in business for the required three years or cannot produce accounts for a three year period but can demonstrate usually through an accountant's reference that they can meet the mortgage payments.
When applying for a self-certification mortgage you will be required to state your expected annual earnings. The mortgage will be offered on the basis of your likely income rather than you having to provide any documentary evidence.
Self-certification mortgages used to require a higher deposit of up to 25%, but now some lenders can offer up to 90% loan to value. Self-Certification mortgage lenders will usually lend up to three and a half times declared income or two and three quarter times joint income. However, with a deposit of 25% or more a Self-Certification mortgage can usually offer up to five times your declared earnings.
Self-Certification mortgages carry a higher rate than standard mortgages because statistics show most businesses fail within the first two years of trading. So if you were to be left with heavy debt there is a possibility you could lose your home. However, some self-certification mortgages are better than others, and, if cash flow is a problem, it's worth checking out those that offer payment holidays and the facility to pay more when you can.
Fortunately there are a number of competitive self-certification mortgage products available, depending on your circumstances and individual requirements. Self-Certification mortgages are now supported by an ever increasing number of mortgage lenders, including mainstream as well as specialist lenders. Interest rates charged are now far more attractive.
Self-Certification mortgages have become increasingly popular in recent years. However, you should always remember that you will be asked your income on the application. Just because you are in a self certification situation, you should only put down your actual income. To do anything else would not only be fraud, but could also mean that you are unable to afford your mortgage repayments, especially if mortgage rates rise in the future.
You may freely reprint this article provided the author's biography remains intact:
About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
Your search for a mortgage isn't leading results.Check for any... Read More
Well, we did it. We are buying a beautiful, brand... Read More
Homes that have been foreclosed can be one of the... Read More
Refinancing your house's mortgage is not the same thing as... Read More
Home equity loan information can sometimes be confusing and misleading.... Read More
Buying a home with bad credit is possible with the... Read More
Refinancing your home or property is a big decision that... Read More
If you have a poor or bad credit history with... Read More
Refinancing can be a very simple process. You fill out... Read More
Home equity loans are often touted as being the solution... Read More
Interest-only loans are quickly becoming a mainstream loan product. Borrowers... Read More
The largest financial obligation most people ever take on couldn't... Read More
If you are among the millions with less than perfect... Read More
You can buy a home with a bad credit record;... Read More
'Flexible mortgage' is a term that's used a lot, but... Read More
Searching for a mortgage can sometimes be a hassle. Where... Read More
"How much should you borrow?" is a question people with... Read More
You might be wanting to look into bad credit home... Read More
With an impending up-grade to the family due in a... Read More
Trying to find a quick homeowner loan can seem difficult... Read More
Here is a useful guide to interest only mortgages. An... Read More
While most multi family properties are designed to allow the... Read More
The decision to buy a home in Florida can be... Read More
Before you borrow money on your home's equity, think twice... Read More
Online high risk home mortgage lenders specialize in offering loans... Read More
One of the things that bothers me about the mortgage... Read More
Buying a home with poor credit is easier than ever... Read More
Every year over 8 million homeowners are seeking help preventing... Read More
There's more Regulation Z compliance on the way, courtesy of... Read More
Buying a home remains the great American dream. Home ownership... Read More
A mortgage is a loan, usually from a bank, finance... Read More
Thanks to the combination of low interest rates and skyrocketing... Read More
Add the term 'online' and it will open for you... Read More
Thanks to the combination of low interest rates and skyrocketing... Read More
A pension mortgage may seem lucrative at the first sight.... Read More
This article will help you understand the differences between a... Read More
Think About the Long Term. Estimate how long you expect... Read More
Why is it that some homes sit on the market... Read More
If you have a poor or bad credit history with... Read More
It is likely to be one of the largest purchases... Read More
Hopefully your ego has never had to experience the words,... Read More
There are many types of mortgages, and the more you... Read More
One of the things that bothers me about the mortgage... Read More
Refinancing your home or property is a big decision that... Read More
There are hundreds of mortgage companies in the Jacksonville real... Read More
Your home is a source of pride and accomplishment. Did... Read More
With the low interest rates being offered by lenders today,... Read More
When you have poor credit, your list of lenders that... Read More
The best home improvement loans usually aren't going to be... Read More
The information in your credit history helps mortgage lenders decide... Read More
While only comprising about 1% of all mortgages, the reverse... Read More
Few of us invest the time and effort into researching... Read More
A fixed-rate mortgage is a mortgage on which the interest... Read More
In many ways a commercial mortgage is just like a... Read More
Mortgage Debt Elimination shows that most home loan debts will... Read More
A home equity loan allows you to borrow against the... Read More
Have you ever asked yourself how much home loan can... Read More
Lots of articles have appeared recently about the booming real... Read More
It is a curious fact of human nature that people... Read More
Home is the place you inhabit. It is the place... Read More
Mortgage cycling is a system that relies on solid budgeting,... Read More
Every year over 8 million homeowners are seeking help preventing... Read More
You've found the home that is right for you, and... Read More
If you are currently looking for a new home, chances... Read More
If you as an investor understand the process, you will... Read More
Do you know what it takes to qualify for mortgage... Read More
Mortgage Refinance |