What is Self Cert? | Who Qualifies for self cert | self-employed | Non-status | Self Certifying a mortgage | Self Cert Rates
Mortgages & Loans Self Cert Mortgages - Self Certifying Mortgages
Certifying a mortgage your self
This is the simple bit! you gather together your accounts (for your own purposes) so you can identify your earnings, based on this figure you can work out what amount of mortgage you can afford.
3.25 times your income plus the full amount of a second income.
A deposit of around 20%+ of the total mortgage value is required and confirms your financial status, after all if your business was not paying you what you say it is you probably would not have this deposit available.
True Self Cert
If you do not have an accountant or if your income is in the form of irregular payments due to seasonal work, multi business ownership or even commission based, it could present a problem confirming your income. With a true self cert mortgage the lender does not make any investigations regarding your employment status or verification of your income.
Exception to the rules
While some mortgage lenders will offer the option of self certifying your income to quicken the application, in some cases checks are made this could be because the mortgage value is unusually high, your deposit may not be adequate, you have a poor credit rating or the lender may feel you have exaggerated your income.
If checks are made they may be done this way
- Your accountant - A lender may ask your accountants opinion as to whether you can afford the mortgage repayments.
- Your employer - There may be a minimum required period regarding your current employment or self-employment
- Paperwork - Your self-assessment forms may come under scrutiny but there is not always a case to see your actual figures, but simply to see your self certifying process, so the figures can be blanked out.
Self Warning
Non-Status - Amazingly some lenders do not ask you to state an income they just ask you to confirm that you will be able to repay the mortgage in a time frame specified by the lender. But be warned........
Just because minimal checks are made and the lender will take your self certified figures on trust this is not an excuse to borrow more than you can afford you must remember that you are responsible for making the repayments on the mortgage. Interest rates may well be low at the time you take out your mortgage but interest rates are fickle and could rise at any time, so a bit of self control regarding your accounts is advisable.
loan to value
This is the figure represented as a percentage of the total value or the price you would pay for the desired property. A £200,000 mortgage on a property valued at £400,000 is loan to value (LTV) of 50%.
Understandably if a mortgage provider is going to take the risk of lending you (with unconfirmed income) money the interest rates and LTV (loan to value) will be different from a traditional mortgage, the maximum LTV currently for self cert mortgages is around 90%. 85%, 80%, 75% or less LTV will usually result in lower interest costs and this can be achieved by providing a substantial deposit.