UK Self Certified Mortgage (Self Cert Mortgage )

A UK Self Certified Mortgage (or Self Cert Mortgage) is ideal for a UK contract worker or part time worker who has unpredictable earnings compared to a salaried employee. The lender will ask for details of the borrower’s earnings but will not ask for proof of income. The mortgage adviser who handles a Self Cert case is still required to make sure any mortgage recommended is affordable, so they will still want to see proof of all sources of income to compare against expenditure. Other terms of a UK Self Certified Mortgage will depend upon the lender’s requirement at the time, and in accord with the interest rates prevailing in the market.

Benefits of a UK Self Certified Mortgage

You can nominate your private earnings without needing to show proof, such as pay slips or business accounts, to the lender.

If you expect your income to rise in the near future, and are confident that you can maintain the monthly mortgage payments, you may be able to acquire a better property than your provable earnings would allow, based on the typical income- multiples that lenders use for salaried employees. However see risks below.

Risks of a UK Self Certified Mortgage

If you over estimate your income or your business does not achieve the estimated revenues and profits in the following years, you may not be able to maintain your Self Cert Mortgage repayments, and your home will be at risk.

If you deliberately overstate your income to obtain a UK Self Certified Mortgage, you should be aware that you would be committing fraud which is illegal. It is also a high risk strategy and will backfire on you should the economy, interest rates or your financial circumstances turn against you.

With a UK Self Certified Mortgage you are unlikely to get more than 75% of the property price advanced from a lender (simply because of the higher risks involved) therefore you need to be able to finance the remaining 25% from other sources.

For further advice and to talk to a mortgage adviser about arranging a UK Self Certified Mortgage just click on the enquiry button below, fill in brief details, and an adviser will call you within the next 24 hours.