Self Certification Mortgages

Mortgages for the Self Employed

It is currently estimated that there are three million people in the UK classed as self employed. That is 10% of the working population. Their proffessions are diverse and include Accountants, entrepreneurs, builders and hairdressers.Millions more work on a contractual basis and some earn their living through investments or rely on large bonuses to boost their annual salary.

Self Employed Mortgages It means that a large proportion of the home buying British public will find it harder to secure a mortgage and until recently would not have been able to approach as many high street lenders.

Self certification mortgages rely on the data supplied through the borrowers accountant and would be based on a 'non status' criteria with lenders more concerned about affordability rather than a monthly salary. Many lenders will, however, expect applicants to state an estimate of yearly income which will then be checked.

Applicants will need to put down a far higher deposit than when applying for a straghtforward standard purchase mortgage. In most cases the minimum deposit required will be 10% but is more likely to be higher as a general rule there will be higher fees the smaller the deposit.

Self Certified House Mortgages If an applicant has 25 per cent depost it is much easier to approach a high street lender and they will be able to offer a product from a range that operate on a 'Fast Track' scheme. They will be asked to provide proof of three years of net profits which will not be verified by the lender, there are then often deals on fees. The FSA concluded that Fast Track mortgages lead to a faster and more efficient home buying process.

There are Do's and Don'ts and these are fairly straightforward. The main one is not to over inflate your income and if done so on the mortgage applications will be classed as mortgage fraud. Flexible mortgages may also be worth looking at if income fluctuates enabling over and underpaying during the course of the mortgage. The borrower must ensure that they repayments are affordable.

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