Self Certification Mortgages
What is a self certification mortgage?
A Self Certification Mortgage is where the Lender will give you a mortgage without you having to produce proof of income.This type of mortgage is suitable for people who rely on bonuses, commission, self employed or on short term contracts and cannot produce monthly pay slips.
Are there any special requirements?
To be considered by the Lender its important not to have any bad credit or debts and you must have a good credit history.
The Lender needs to see bank statements, company accounts and any documentation to prove that you have money coming in fairly regularly and you will be able to repay the loan. They may also ask you to estimate your income and take this figure on trust.
Is this because of the recession?
With the high risk involved in the present unstable market with jobs and house prices, Lenders are reluctant to give out mortgages unless they know that they will be redeemed.
What are the drawbacks?
As there is a higher risk to the Lender the interest rates are usually higher than other mortgage deals but there are a few different self certification packages available so it is important to find a good mortgage broker who will have contacts and search out the best option for you.