self certification mortgages uk: Exactly What Is Involved ?

2007-03-08 10:33:40

( Financial )



If you apply for mortgage you have a wide range of options. You could apply for equity mortgage or refinancing mortgage or even self certification mortgages uk.

What is self certification mortgages uk?

There are a growing number of workers engaged in short-term contracts or who are self-employed who, even though they are financially stable, find it difficult to prove that they are financially sound to potential lenders.

However, there are a few mortgage lenders who recognize this lucrative niche market and who will welcome you if you are in this situation. The specialized mortgages they offer you are known as self-certification mortgages uk.

These specialized lenders understand your needs as a self-employed mortgage seeker and are constantly improving the terms and features of the mortgages they offer to meet the changing needs of the market.

Self-certification
This is a way of detailing your income simply by declaring your earnings and a specialized self certification mortgages uk lender won’t ask to see audited amounts.

Ideally this is how it should work.

However, even some specialized lenders require that you prove your income in some way. This could be an accountant’s certificate – a document which your accountant signs saying that you have enough income to meet the loan you request. The lender might also ask for your business bank statements over a period of time to assess your gross income. The lender could also do credit searches. As a home-owner you could need to show your mortgage statements. If you are renting the lender could ask your landlord to give a reference.

There are limits to self certification mortgages uk. In some cases, even if you are allowed to prove your income in the ways mentioned above, the loan will only be granted if is below a certain percentage of the total value and so you will need to have sufficient deposit to put down. Some lenders however will allow you to borrow more on a self-certification basis. It pays to shop around.

If you need to borrow even more of the property value because you have a smaller deposit available it is difficult to get approval for a self certification loan.

As proof of your income, your accountant will have to provide a few years of auditing accounts sufficient to prove that your mortgage can be paid in terms of your net profits.

This is a problem if you have been in business for less than the period required or if there has been a down-turn in your accounts. Some lenders will look at an average over three years rather than just your earnings in the current year.

Whichever way the lender requires you to prove your income they will certainly carry out a credit check.


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