Self-certification mortgages have been created by mortgage lenders to allow borrowers to 'self-declare' or 'self-certify' their annual earnings.
Declaring how much you earn is a major part of the mortgage application process, and being 'self-certified' has been around for about a decade. Originally, self-certification (or self-cert) mortgages were purely for the self-employed and those who ran small businesses but could not provide traditional evidence of three years income.
Any person who has an irregular income could be eligible for a self-certification mortgage. For instance, those people who have seasonal jobs (those in tourism who make money during summer and little during winter) or those whose income is largely commission based, could be eligible for self-cert mortgages. Workers who receive large Christmas bonuses, or those whose salary comes from a number of different sources may also be interested in self-cert mortgages.
Self-cert mortgages require the borrower or borrowers to state how much they earn on the mortgage application form. Although the borrower may not be asked to prove this, the lender could ask for business bank statements to check the gross income received. Those who already own a home may also be asked to supply mortgage statements.
When taking out a self-certification mortgage, the borrower may be expected to place a larger deposit and in some cases pay a higher rate of interest. Interest rates are slightly higher to represent the risk posed by the loan.
At Professional Mortgage Services we will review your requirements to establish which lender is offering the best product based upon your individual needs.