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Are Self-Cert Mortgages Still Available?
Self-certified mortgages were once a popular option for those who were Self-Employed and wanted to buy a home. Are they still an option for people seeking a mortgage?
What are self-cert mortgages?
A self-certification mortgage was a unique type of product where the borrower didn’t have to provide proof of income to the Mortgage Lender. Instead, they stated their annual earnings and signed to ‘certify’ that the information was accurate.
Banks introduced these mortgage products for customers who found it difficult to evidence a steady, stable income. They were popular with the Self-Employed and people running small businesses. In many cases, these mortgages were the only way they could buy a home.
Why aren’t self cert mortgages available now?
Self-cert mortgages were banned in the UK after the Financial Conduct Authority (FCA) reviewed the mortgage market in the wake of the 2008 credit crunch. This type of mortgage had become known as ‘liar loans’ as it was too easy for people to overstate their earnings to get a loan – and subsequently get into financial trouble.
A major cause of the financial crash was ‘sub prime’ lending – with financial providers increasingly approving borrowers that would struggle to repay their mortgages. Interest only mortgages also became much more heavily regulated at this time.
Now, Mortgage Lenders must ensure that every customer can comfortably afford the repayments on their mortgage, which is why proving income is an important part of the mortgage process.
Getting a self-cert mortgage overseas
While self-cert mortgages are not available in the UK, there are some overseas providers advertising loans with no proof of income.
But overseas mortgages like these are very risky. You could find that Interest rates are very high, with hidden fees and charges. They may be unregulated, which could mean there is no course of action should you feel you have not been treated fairly.
Explore the UK mortgage options carefully. It is not difficult to find traditional mortgages for Self-Employed people.
What are the alternatives?
Getting a Self-Employed mortgage is straightforward if you have been trading for two years or more. You just need to find a suitable lender and provide them with tax details and accounts. UK lenders accept many different forms of income including salary and dividends and net profit.
How can a Mortgage Broker help?
Here at Independent Mortgage Solutions our Mortgage Advisors are here to help you explore your options. We’ll explore your property plans and your financial situation to identify the most suitable products and lenders.
We’ll then compare rates, criteria and fees across the marketplace – from high street lenders to specialist companies.
We’re not just here for mortgage advice. We’ll help you throughout the mortgage application and beyond, supporting you every step of the way until you have the keys to your new home.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP THE REPAYMENTS ON YOUR MORTGAGE