Self Certified Mortgages
Mortgages are a generic name given to schemes that do not need evidence of income. Instead they rely on the customer’s declaration of how much they earn each year. There are different types of schemes to suit different circumstances.
Lenders realize that many people just do not fit standard lending criteria, much of which may have been written many years ago. Just because they do not fit does not mean the client is a bad risk or they cannot afford the mortgage they want. It means they cannot, with good reason, meet standard evidence of income requirements and need a different type of mortgage, in this case self.
Most employed people can prove their income by showing their last three pay slips. Easy! However, what if they also have rental income from investment properties, or from a trust, share dividends or an offshore venture? It may still be difficult to prove every last penny and self certification mortgages may be the answer.
It may sound strange being able to take out a mortgage without having to produce proof of income, but it’s true. Self certificate mortgages don’t require borrowers to produce payslips, bank statements or audited accounts. Instead, the mortgage lender will take a declaration of your income on trust and “underwrite” the mortgage according to what you can afford. It’s that simple – with self certificate mortgages the only requirement is for you to give an honest declaration of how much you can afford.
Self certification mortgages are not designed to allow people to declare a false amount just so they appear to meet criteria. Such false declarations are a form of fraud and a serious criminal offence. Anyone who cannot take a conventional mortgage is eligible for self certificate mortgages.
Choosing the right mortgage for you is the same whatever type of product you need. Interest rate is important, especially with self certificate mortgages where the rate tends to be slightly higher than conventional loans, but it’s not the be all and end all. In fact, there is so much choice that it’s possible to pick from many self certificate mortgages that suit your needs in order to find the best deal. A mortgage broker will be able to take you through the options and ensure the self certificate mortgages available are easily accessible.