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What is a Self Certification Mortgage?

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What is a Self Certification Mortgage?

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A self certification mortgage is a mortgage that allows you to declare how much money you earn from employment. The self certification mortgage was first used around ten years ago. It was established mainly for small businesses and self- employed earners who did not have the required three years income evidence that lenders require. The self certification mortgage is not just for self-employed workers. Anyone who earns money irregularly can benefit from a self certification mortgage. People who are in seasonal employment or people who earn their money through commission, such as salespeople, will find the self certification mortgage helpful. One of the main ways a self certification mortgage differs from other mortgage types is that you may be asked to put down a higher deposit. You may also end up paying a higher interest rate on your mortgage loan. Borrowers who obtain a self certification mortgage may find that they need to put down a deposit of 70 to 80% of the value of the home. W

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Self certification mortgages have been available for the last decade. They were introduced to help home buyers who had funds available for a deposit on a property but were unable to demonstrate their true earnings, often because they are either self employed or working as a contractor. Approval can be within 60 seconds with some lenders and we can therefore set the ball rolling almost immediately. Make a NO OBLIGATION enquiry now! High Street lenders use salaries declared on P60s and wage slips to determine how much they can ‘safely’ lend. If you do not fulfil their criteria of requesting a mortgage that is no more than 3 or 4 times your proven salary you are likely to be rejected. If you are self employed or a contractor caught out by High Street lenders’ requirements self certification mortgages may offer a practical, easy solution with minimal paperwork. In essence self certification means that you do not have to prove your earnings. We at Self Cert Mortgage UK can help identify the

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A self certification mortgage is basically a normal fixed rate mortgage or variable rate mortgage where the lender doesn’t need to see proof of your full earnings to grant you a mortgage (subject to their other lending criteria of course). You’ll still need to declare your income and sign a declaration that this is accurate. Who Are They Suitable For? If your income is a bit erratic you may still be able to get a mortgage on a self certification basis. This could be if you: • have a large proportion on commission based income; • are self employed and have not been trading long enough to have a few years’ accounts; or • have income from a number of sources. For the best current deals for around compare self certification mortgages best buys. What Should You Look Out For? • As these are standard mortgages, the same considerations apply as any regular mortgage. Moneyfacts.co.uk has a range of guides on other types of mortgages from variable rate mortgages, fixed rate mortgages, discounted

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It’s essentially a mortgage whereby you decide whether or not you are capable of making the repayments. And that is when the penny dropped, because you see the entire process of applying for a mortgage is premised upon an institution (such as your bank) deciding whether or not you are able to make the monthly repayments. And what is the formula for working this out? Well, if you are employed it is your salary – a bank will lend you, say, 3 or 4 times your annual salary. Normally they will ask you for a small deposit, say 5%, to demonstrate that your intentions are serious. Obviously, if you are self employed, and particularly with no accounts, you often do not have an annual salary and you are unable to demonstrate regular monthly income. Many self employed people – notably me – live hand-to-mouth, regularly waiting for reluctant clients to settle outstanding invoices. So how can your ability to repay a mortgage be judged? I discovered that self certification was the answer – i.e. YOU.

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