A Self-certification mortgage is where no proof of income is asked for by the mortgage lender. Self certification mortgages require the borrower to prove that they have the funds in their bank account to pay the monthly mortgage repayments.
When applying for a mortgage, there may not be any way to provide full and verifiable proof of how the deposit and repayments will be made.
In most cases the actual income of the applicant may have been scaled down for taxation purposes. Self-employed workers, for example, probably exploit various tax minimisation methods in order to save on company tax and income tax. When it comes time to complete a mortgage deal their genuine earnings may be understated, causing a state in which they are able to borrow a less significant amount than what they can in reality afford.
It has been stated that many self-employed workers do not keep accurate or exact records of their income and as a result may not be able to provide past years of trading accounts to lenders when completing an application for a mortgage deal. It makes life difficult to secure a full-status mortgage when applying through either Internet or when meeting a high-street lender.
A self-certification mortgage is created to help people in situations such as these. The mortgage depends on how much an applicant can afford and the ability of the applicant to keep up with repayments, it however does not require proof of income.
There are many self-certification mortgages available on the market. Terms and conditions differ between products and they can change factors at any time, in due cause to this, it's always safer to speak to a mortgage broker so that you can get a good insight on which mortgage to go for.
Please visit Mortgages UK for general mortgage related information...
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