Self Certification Mortgages

Around a fifth of the UK is self-employed and it is  predicted that, in the next decade, there will be about 3.2m in this position. Many self-employed people earn lots of money.  However,  if they want to buy a home, they are likely to come have problems that are very different to those of us who are salaried because some mortgage lenders can be wary of anyone who cannot prove their earnings through the PAYE system.

 A self-certification mortgage is a mortgage offered on the basis of you stating what your likely income will be, rather than providing documentary evidence. But you may need still need to ask your accountant to back up your application. If you have more than two - and, in many cases, three years' worth of accounts, then you should be able to apply for a mortgage in the normal way through a high street lender or via one of the links on this site.

 Self-certification mortgages are not standard products so there are only a handful of lenders who are prepared to offer mortgages on this basis. However, the market is becoming more competitive and available deals are consequently becoming more competitive. Although you are still probably going to pay more to begin with there should still be the opportunity to switch to a better rate - and, often, another lender - a few years down the line. Self employed people are asked to pay a higher rate because historically a large number of businesses fail in the first two years. So lenders are cautious about the risk to them and charge a higher rate to offset that risk

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. Whereas standard mortgages typically offer a 95% loan to value, self-certification mortgages almost always require a higher deposit: a loan-to value of 90% and, more commonly, 75% is usually offered

You can find some great UK mortgage offers here on this site.  Just click on the links on the left hand side to find out more!