Self Certification Mortgage
A self certification mortgage is often referred to as a non-status mortgage, and is available to both the employed, self employed, first time buyers and those with a bad credit history alike. They have become very popular in recent years, as working environments and practices have moved away from the more conventional 9 to 5, and where monthly income may come from several different sources. A self certified mortgage is specifically designed for people whose income is difficult to assess using the standard underwriting criteria used by most mortgage lenders.
Self certification mortgages allow you to declare your income without having to provide the documentary evidence usually required when applying for a mortgage.
As well as the self employed and employed, a self certification mortgage may also be applicable to other categories of employment. These could include:
- Employees on short-term or part time contracts
- Employees who depend upon bonuses or commission for a significant proportion of their income
- Unsalaried company directors
- Low wage earners with other income or material assets upon which they rely for future payment.
- Contract workers (increasingly common in technology-based industries)
- People with seasonal earnings
- Those with more than one income
- City workers or others who receive a high annual bonus
- Freelance workers
Self Certification Mortgage
With self certification mortgages there is no need to supply accounts, bank statements, payslip's or any other proof of income. Instead the lender will conduct a credit check and credit score, and in some cases may apply for a lender reference or landlord's reference.
The interest rate on a self certification mortgage is likely to be a little higher than normal rates. This reflects the extra risk and costs involved in the lender providing the self certification mortgage. A typical deposit is 15% although lower rates are available to those borrowes that can put down a 25% deposit. The minimum deposit required for a self certification mortgage is 10% albeit that only a small number of lenders provide a 90% self certified mortgage.
