Self certified Mortgages in the UK

Have you been in business for over 3 years? Can you provide accounts from those three years to show that your business is making profits and you have sufficient income to finance a mortgage properly? Many people, who are perfectly able to finance a mortgage, can't prove it, and so need to resort to self-certification mortgages. You can obtain a self-certification mortgage by declaring your earnings and asking an accountant to provide a reference for your stating that you will be able to finance mortgage payments. Your accountant will need to sign a certificate to say that you are earning what you are declaring.

In theory, you will not have to produce accounts, but you may need to produce bank statements to show your gross income in your business bank account. The lender will also carry out a comprehensive credit check on you, to look at your credit history and see if you have a history of paying off your debts. Should you already have mortgages, you can produce mortgage statements to show that you have been paying off your mortgage. If you are renting, you may be able to get a reference from your landlord.

You should look at how much savings you have put away to see if you can provide a deposit on a house. Most lenders will want you to pay 25% of the value of the house, but some will allow you to only provide 15% of the value. Because lenders are taking what they regard as a massive risk in lending to you, you may find you will be paying a higher amount of interest.

The sub-prime mortgage market is available to you should you not be able to find a self-certification mortgage from a mainstream lender. Sub-prime lenders deal with bad credit holders or people who are being refused mortgages elsewhere. You have to understand that it doesn't matter how good your credit record is, if you are not able to prove that you are earning enough to finance your mortgage you won't get a mortgage from a mainstream lender. Your accountant may have been helping you out for tax reasons by understating your profits for the past few years, which may come back to haunt you.

There are many people who are not able to produce 3 years accounts, yet can easily pay a mortgage. They are called "complex prime" customers and lenders are becoming increasingly interested in these people. Just because they are not able to fit into a mainstream mortgage lender's criteria, doesn't mean that they do not deserve to be offered a mortgage, and the market seems to be moving to serve them.

 

 

 

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