Who can get a self Certification Mortgage?
To be eligible for a self certification mortgage requires nothing special. Self certification mortgages are designed for those who have difficulty proving income, like the self employed and seasonal workers. However, there is no group who are specifically excluded.
Self employment Self Certification
For many who are self employed, self certification may be the best way to get a mortgage. Those who are self employed may have a volatile income or their income may be in the process of growing. Therefore, it would be difficult to prove the necessary income through standard accounts and payslips. However, if a self employed person has sufficient proof of income he may find he can get a better deal through a standard mortgage.
Self Certification for Employed workers.
Accountants, lawyers, civil servants, teachers and other public sector workers could get a self certification mortgage if they wanted. As a teacher, I got a self-certification mortgage because it was the best deal in my circumstances. However, if you are employed, it is more difficult to dispute your income, because it is clearly in black and white. If you were to claim significantly higher income, most self certification firms would find it suspect. However, there are certainly some self certification firms who are not interested in seeing accounts.
Self Certification and Deposit.
If you wish to get a good self certification deal, the key is to have a reasonable deposit for the mortgage. Often self certification mortgages require between 15% and 25% deposit. If you have this kind of deposit, negative equity is very unlikely and mortgage firms have more confidence in lending large amounts. There are self certification mortgages with 5% deposit or less. However, they will have a higher interest rate to compensate for the risk.
Self Certification and Remortgage.
If you have had a mortgage for a few years and are having difficulty remortgaging because your income has fallen, this is a good time to consider self certification remortgage. This is because you will probably own a significant % of the mortgage house. Several years of payment will also help convince a lender that you would make a good borrower.
See: Guide Remortgaging
Self Certification and Bad Credit.
If you have a bad credit history you may have to look in the sub prime mortgage industry. This has come under increasing scrutiny recently. Problems in the American sub prime market have caused concerns that people are taking out mortgages they are unable to pay back. Therefore, it is becoming more difficult. As usual a good deposit will help. But, also bad credit will mean a correspondingly higher interest payment.