2nd-Mortgage

A mortgage self certification is a method a declaring income that will be suited to an applicant who may have sources of income that are not easy to prove. It is important to note that a mortgage self certification is not a type of product; rather it is a method of declaring income.

There are a number of different situations in which a mortgage applicant may not be able to provide full and verifiable proof of their income. This includes applicants who are self-employed, company directors, freelance workers, or workers who receive their income on an irregular basis through commissions and bonuses.

Originally mortgage self certification products were designed for the self-employed. The changing composition of the workforces has, however, meant that many employees cannot fully prove their employment income as well.

Not having to fully prove income is believed by some analysts to increase the risk of over borrowing and therefore repossession.

Disadvantage is that there are still a limited amount of lenders willing to provide these types of mortgage at the moment, compared to the hundreds of lenders for traditional mortgages. On top of this, you’ll probably have to pay a higher deposit – unlike the typical 5% down on a normal mortgage, you can expect to pay as much as 25% of the cost of the house as your deposit.

Despite this, self-certification mortgages are an excellent option for anyone struggling to buy a house because they’re self-employed. With many even offering an option where you can defer payments until your own invoices are paid, they’re ideal for those where income isn’t guaranteed to be on time.