Mortgages

Self Employed Mortgages

Self cert mortgages Self-certification mortgages are for those people who can't prove their income in the usual way. These include the self-employed, contract and freelance workers, people with more than one job, those relying on big bonuses and funds from investments. Those who rely on pensions and maintenance payments.

With self-certification you state what your income is and the lender gives you a mortgage on that basis. Generally the amount the lenders will allow you to borrow will be based on the average of your earnings over the past three years.

Self cet mortgages from Best UK Mortgages As a rule of thumb, specialist lenders are prepared to offer three and a quarter times your income if single and two and three quarter times your combined income if the application is for a joint mortgage. Specialist lenders may not require such stringent proof and you simply have to state your income. If you are required to provide documentation this will usually be in the form of validation from a certified or chartered accountant. You will be required to pay a larger deposit typically 10-25 per cent although more recently, in some cases it is now possible to borrow up to 90 per cent. You will also be expected to pay higher fees.

They will be required to run a credit check on you. So it pays to check your credit before applying for a loan although a poor credit record needn't prevent you taking out a mortgage. Your credit record may be affected by the following;

 

Mortgages for self employed If you are turned down by the lender, ask them to give you the name of its credit reference agency, who is required by law to give you details of your credit file. Many specialist lenders are sympathetic to what is often known as sub-prime or credit-impaired borrowers. Infact, it is said that 25% of applicants are rejected by standard lenders.

The range of mortgage deals available to the self employed is increasing. With many more people working on short-term contracts it is not always possible to tick all the right boxes and with an estimated three million people in the Uk working on a self employed basis, self certification is commonplace.

If you apply to one of the big high street lenders such as Bank of Scotland or Bristol and West they will ask you to state an estimate of your yearly income which will be checked by the building society.

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Don't assume if you are self-employed that a self-cert deal is the only option. Deliberately inflating your income could be disastrous and as with any mortgage it is important that the mortgage payments are going to be affordable. Some high street lenders such as Bristol and West, carry out pre-completion counselling, to make sure that the borrower is happy with the level of financial commitment.