The Truth About Self Certification Loans

The Truth About Self Certification Loans
Ten years ago if​ you​ were self employed you​ were very limited to​ the​ deals that were available to​ you​ .​
Lenders tended not to​ like it​ if​ you​ couldnt prove you​ income when apply for a​ secured loan or​ mortgage.
Things have changed,​ because they have had to​ .​
With more and more people starting their own business and companies opting to​ contract staff on​ a​ self employed basis,​ lenders have had to​ change policies .​
Now many more lenders have had no choice but to​ offer self certification loans and mortgages in​ order to​ service more customers.
With a​ self certification product you​ can state your income without having to​ provide payslips .​
Such loan and mortgage products are available with specialist and some high street lenders.
The hook is​ that with a​ self cert loan you​ will normally have to​ pay lager deposit and slightly higher interest rates than a​ standard borrow would .​
You should also be prepared to​ incur slightly higher fees as​ well.
Different lenders will have different criteria .​
Some will be more concerned about affordability,​ others with job title and credit history others will require accounts,​ accountants letter or​ bank statements.
Whether you​ are with a​ specialist lender or​ a​ high street one,​ you​ will generally need a​ minimum of​ a​ 10 per cent deposit (some 5 per cent) .​
In most cases the​ bigger the​ deposit you​ put down the​ lower the​ interest rate will be,​ because you​ are reducing the​ lenders risk .​
You will also pay more fees when putting down a​ small deposit.
Self Certification loans and mortgages used to​ only be available through specialist lenders,​ but this is​ now changing .​
a​ handful of​ dynamic lenders have realised that they need to​ include the​ self employed into their mainstream products.
Even if​ you​ do not have three years worth of​ accounts,​ do not think that a​ self certification product is​ your only option .​
Lenders are now embracing more sophisticated credit scoring techniques to​ better weigh up the​ potential lending risks.
Another bonus for the​ self employed,​ is​ that if​ you​ can get together a​ 25 per sent deposit then you​ will be able to​ approach most lenders and choose from their mainstream loan products .​
Also because of​ the​ size of​ the​ deposit you​ are putting down,​ many of​ the​ fees will be crossed out.
Although self cert loans are a​ lifeline to​ many legitimate people there are a​ small number of​ borrowers that take advantage by lying about their income .​
Over inflation of​ income in​ order to​ have access to​ more lending or​ get on​ the​ housing ladder is​ not only illegal but also very dangerous .​
People that do this will often find that eventually they fall behind on​ their loan repayments and can face repossession .​
It pays to​ make sure that you​ are always honest on​ your application.
The key rule is​ to​ ensure that your mortgage loan repayments are going to​ be affordable .​
Flexible mortgages are great for the​ self employed that might have seasonal spikes and dips in​ their income .​
They allow you​ to​ overpay,​ underpay and take payment holidays if​ you​ wish to.
The best way to​ ensure you​ get a​ good deal and the​ right product is​ to​ use a​ good broker .​
They will have access to​ a​ number of​ lenders and products and be able to​ advise you​ on​ the​ best cause of​ action.

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