Self Cert Mortgages:
A look at our Self Cert Mortgage solutions and help...
Self Cert Mortgages, or to give them their Sunday-name, "Self-Certification Mortgages", have been introduced into the UK marketplace in order to deal with the anomalies and fluctuations of the ever growing army of the self-employed sector, and their borrowing requirements.
Here we'll take a more detailed look at the Self Cert Mortgage together with our available help and self cert mortgage solutions available. We'll explore why self-cert mortgages have a place in today's UK mortgage marketplace, and also investigate the potential downsides to a self cert mortgage. We'll also look at how Shire Direct can usually help with a bad credit self cert mortgage (i.e. self cert mortgages for those that may have experienced credit difficulties of some form).
Self Cert Mortgages table of contents:
Why are self cert mortgages necessary?
The self cert mortgage is a way of obtaining mortgage funding by detailing your income without having to provide proof, and is a commonsense approach to the difficulties associated with the type, frequency and stability of income generated by people in business.
Most self-employed borrowers obviously employ the services of an accountant, who will prepare what is little more than a snapshot of their client's business on a certain day at the end of their trading year. Indeed, part of the accountant's duties is to ensure that their client pays the lowest amount of tax possible. To do this, the accountant will offset all the appropriate expenditure that they can against the client's income, which of course the employed person cannot do.
Other disparities include the fact that many company directors will often take a sizeable amount of their income in dividends, and will save themselves both tax and national insurance contributions by doing so.
As a result, more and more lenders will offer this alternative method of income proof, rather than the staid old requirement of providing three years audited accounts, the averaged Net Profits of which must be sufficient to support the borrowers mortgage requirements. This method has proved to be so disadvantageous in recent years because:
- it excludes borrowers who have not as yet completed three-years self-employment
- one of the three years may show a loss, and will therefore reduce the average, as well as being unrepresentative of the current situation
- the accounts take no account of current income levels, which could be substantially different
- the real income is mitigated by accountant's making use of taxation allowances.
What are the potential downsides to self-cert mortgages?
It's not all sunny skies with self cert mortgages though! The Self Cert mortgage can be restrictive, for example many lenders restrict this type of mortgage to a maximum of 75% LTV (loan to value), although some mortgage lenders will actually extend these parameters up to 85% - 90% LTV in order to assist borrowers who prefer to self-certify their income. The self certificated mortgage products can also be marginally more expensive, due to the fact that they are considered to be a higher risk to the lender. Certain practices involving lenders, mortgage intermediaries and borrowers have been highlighted by the media in recent times, where the parties have colluded together to bring about much higher borrowing levels than was prudent, by the deliberate overstatement of income.
Self Cert Mortgages are not a means to achieve mortgage funding because the process of income verification is not undertaken. Income Self Certification is not an invitation to exaggerate your income to achieve a lender's income criteria. The misrepresentation of income by deliberate exaggeration is a criminal offence and may result in action for fraud.
The bad credit self cert mortgage - can Shire Direct still help me if I've experienced credit difficulties?
In most cases, you'll be happy to know that yes we can assist with a bad credit self cert mortgage!
At Shire Direct, we understand that not everything in life is clear cut. We do appreciate that business people have to adjust to a different set of rules when it comes to arranging mortgage funding, and so if you do work for yourself, you will be only too aware that your income is likely to fluctuate dramatically, and your past records may not be reflective of current trends of income.
That's why income self-certification is a strong feature of many of the mortgages we arrange for our self-employed customers. Remember our qualified mortgage advisors are available to discuss the options open to you, and we can usually come up with a solution - even in the trickiest circumstances, including situations where you may have experienced financial difficulties such as CCJ's, Defaults, mortgage arrears, an IVA or Bankruptcy.
We are sure you will find our service to be both comprehensive and personal, and you can be assured that our specialist advisors look for reasons to fund a mortgage application, and not to decline it! We have an extensive range of products, and excellent relationships with the lenders we use.
Like to know more about our self cert mortgage solutions?
If you're self-employed then and are looking to move home or simply want to remortgage to a better deal or raise additional capital, we have a portfolio of self cert mortgage plans, and can offer a loan to value of up to 90% (and depending on status of up to possibly 95%). So, it's a good idea to get in touch with us here at Shire Direct and have a word with one of our professionally qualified mortgage advisors, naturally without any obligation.
We'll take you through the various options that may be open to you, and clarify any aspects that can be confusing and time consuming. We'll carefully establish your circumstances, needs and aspirations, and provide you with appropriate advice and a recommendation, after taking into account preferential rate periods, such as a fixed rate for 2-years, and check other important facets like tie-in periods, early repayment charges, lender's valuation charges and scheme fees.
Please don't hesitate to contact us if you would like to discuss your requirements, and you'll find our service to be friendly and helpful, and not in the slightest bit stuffy! Our mortgage advisors are available on Freephone 08000 282 281 up until 10pm everyday (including weekends), and will be only too happy to provide you with a rapid in-principle decision, alternatively why not enquire online at any time.
Well that concludes our look at Self Cert Mortgages, and how we can help with a tailor made self cert mortgage solution just for you. Don't forget there is a wealth of further information throughout our website and that we're only ever a free telephone call or couple of mouse clicks away and will be delighted to help in any way we can!
