Overview of Self Cert Mortgages

2007-03-08 10:33:40

( Financial )



Self cert mortgages, also known as self certified or self certification mortgages, have become popular during the recent years because of the increase in the number of people who are either self employed or whose major source of income is from commissions or bonuses. Furthermore, financial institutions and loan providers have become more flexible with their loan requirements, enabling those with no proof of steady income to obtain secured loans. Previously, people who cannot show a verifiable proof of income find it very difficult to get mortgages from big loan providers and banks.

Mechanics of self cert mortgages

A self cent mortgage permits a person applying for a loan to certify his or her own earnings or income without having to provide documentation, such as certificate of employment or pay slips. In this type of loan, you just declare your anticipated annual income without being asked to provide any proof. Lenders usually just base the amount of the loan on your expected earnings. You can apply for self certified mortgage if you are self employed or employed.

Loan providers and financial institutions usually require a large deposit from a person interested in securing a self cert mortgage. Some lenders conduct credit and background checks, while others might require bank certifications. However, there are also a number of lenders who would only ask you to verify your ability to repay the loan.

People who can benefit from self certified mortgage

This type of mortgage is really designed for self employed individuals. Most people who are self employed or are just starting to operate their own business usually do not have financial statements during their first few months in business. Thus, they cannot get other types of mortgages. Some employed individuals can also take advantage of self cert mortgages. Overseas workers or those whose income are mostly based on commissions and bonuses could also choose to get self certification mortgages. People with unpredictable income, such as work at home moms and freelancers, and company directors who usually have small salaries but huge bonuses or dividends can also benefit from this type of secured loans.


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