Self cert mortgages are available to clients who cannot verify their income instead you certify your income by declaring it on the application form meaning you do not need to provide any proof of income. They are specifically designed for people whose earning capacity is difficult to assess using the normal practices adopted by most conventional mortgage lenders. These mortgages are available on both residential and commercial property.
In recent times, many changes have affected things in the financial services industry and potentially the biggest of the changes is the wide adoption of the online application because this has pushed this part of the business to move towards being way more competitive and because of this it is now feasible for the general public to keep more of their own money in comparison to what was achievable just a short number of years previously.
Although they can help self-employed people buy a home, a self cert mortgages have a few downsides when compared to a normal mortgage. Much like a bad credit mortgage, it usually involves a higher interest rate, due to you being seen as a potentially bad risk (even if you’re earning over six figures a year). This is especially true if you’ve been trading less than 2 years, when most businesses traditionally fail.
Another disadvantage is that there are still a limited amount of lenders willing to provide these types of mortgage at the moment, compared to the hundreds of lenders for traditional mortgages. On top of this, you’ll probably have to pay a higher deposit – unlike the typical 5% down on a normal mortgage, you can expect to pay as much as 25% of the cost of the house as your deposit.
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