What are self-certification mortgages?

These were brought in nearly a decade ago and were designed mainly for those who had a reasonable amount of deposit but were unable to show their true earnings, in most cases the self-employed.

Normally three years’ accounts would be asked for and in many cases these were not always at hand. Even if they were, the whole point of their accounts would be to save them tax, but most lenders will look at net profits.

By putting in a deposit of say 20%, a few lenders will allow clients to certify their income and therefore not look into it.

Also some of them will not require letters or promises from the accountant. I myself do quite a lot of mortgages in this area and can get these done with only a 15% deposit. This type of mortgage is very good as it means that because you are putting in a sizeable deposit, your word will be taken instead of scrutinising every nook and cranny of your financial life.

This makes the buying of property easier for a section of the market that has long been ignored, and dare I say, under-rated. For years (and still the case now) lenders have looked favorably upon applications for the employed and down their noses at the self-employed (they will deny this of course). The reality is that an employed person can lose their job or be made redundant, options that do not exist for the self-employed.

There are one or two lenders who say they offer this type of mortgage, but in reality the story is different; often lenders who say they self-cert, in reality will want more detail than they would with a full status case.

Those with a reasonable amount of deposit but unable to show their true earnings would suit this type of mortgage, but like you might imagine, it is not always as simple as that.

The first time you are turned down you should find out why. Ask the lender and if they won't say, write to the two main credit reference agencies - Experian (www.experian.co.uk) and Equifax (www.equifax.co.uk) - requesting a copy of your credit file