Self Certificate Mortgages Prove Yourself

Self Certificate Mortgages Prove Yourself



Self Certificate Mortgages – Prove Yourself!
Bank managers are probably the​ most risk-averse individuals you​ are likely to​ meet – without proof of​ a​ regular salary and sound financial track record you​ may presume a​ frosty reception when you​ ask about borrowing .​
However,​ there are options available for people who don’t conform to​ the​ norm.
If you​ are self-employed or​ have an​ erratic income,​ you​ can consider a​ self-certified mortgage .​
As the​ overall mortgage market has become more flexible and competitive in​ the​ past few years,​ the​ amount of​ lenders offering self-cert mortgages has increased .​
Whereas they used to​ be the​ preserve of​ specialist lenders,​ and come with pretty strict terms and conditions,​ you​ can now find self-certs from most of​ the​ major high street banks and building societies.
The set up
Normally,​ lenders will look for a​ larger deposit when you​ take out a​ self cert mortgage – 25% is​ usual .​
As far as​ proving your earnings,​ some lenders such as​ the​ banks and building societies,​ will look for certified accounts for the​ last 3 years .​
They may also require bank statements and carry out credit checks .​
However,​ there are some mortgages available where the​ lender only asks for you​ to​ verify that you​ can afford the​ repayments.
Who’s it​ for?
This type of​ mortgage usually caters for self-employed people,​ but there are others who can benefit .​
People who work overseas,​ or​ who earn bonuses that do not show as​ part of​ their salary may choose to​ self-certify .​
Business owners and company directors sometimes award themselves a​ minimal salary,​ but have a​ larger income through dividends,​ for example .​
This can be useful when it​ comes to​ tax management,​ but make finding a​ conventional mortgage harder .​
If you​ have an​ erratic income,​ you​ may want a​ more flexible mortgage that allows you​ to​ increase or​ decrease your monthly payments according to​ your current situation.
The drawbacks
You may find the​ terms less generous than with other types of​ mortgage,​ and the​ lender may apply Higher Lending Charges or​ an​ indemnity to​ protect them .​
The FSA recently highlighted the​ disturbing trend of​ some brokers encouraging borrowers to​ inflate their reported income in​ order to​ gain a​ larger mortgage .​
Remember it​ is​ a​ criminal offence to​ lie about your income,​ and over-estimating what you​ earn could mean that you​ find yourself with monthly repayments that you​ cannot afford .​
If you​ are subsequently unable to​ meet repayments your home could be repossessed.




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