What Type of Self-Certified Mortgages Are Available?

NOTE: the information below on self–certification mortgages is out of date. Since it was written, the Financial Conduct Authority, the UK regulator, now requires lenders to check affordability when receiving a mortgage application. Therefore UK mortgage lenders no longer offer self–cert mortgages as such. To comply with the regulations, they have the right to ask for proof of income to assess the affordability of a mortgage in all cases when you apply for a regulated mortgage contract. If you are unsure if you will qualify for a mortgage you should always seek advice from a suitably qualified mortgage advisor . Here’s the historic content. We’re leaving it online for the record.

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The choice of self-certified mortgages is getting wider all the time, and self-certifiers now have almost the same range of choices as full status mortgage holders (those who provide complete proof of income).

Examples of types of self-certified mortgages include:

• Fixed Rate Mortgages
• Variable Rate Mortgages
  
• Tracker Mortgages
• Capped Rate Mortgages
  

Another advantage of self-certified mortgages is that it is sometimes easier than usual to get a portable mortgage – one that can be moved from one property to another.

This is very useful if you are thinking of buying a house to do up, before selling it on and buying another.

Just as with all mortgages, there are a number of areas to check before you sign:

• Early repayment / redemption charges
• Speed of approval (some lenders can take several weeks)
• Portability
• Exactly what information the lender requires about your income and status
• What the minimum deposit is (usually 10% or more)
• Flexibility – can you overpay or take payment holidays?

A good independent broker can advise you on these areas, and make sure you understand the details of each policy.

Aren’t Self-Certified Mortgage Interest Rates Higher?

NOTE: the information below on self–certification mortgages is out of date. Since it was written, the Financial Conduct Authority, the UK regulator, now requires lenders to check affordability when receiving a mortgage application. Therefore UK mortgage lenders no longer offer self–cert mortgages as such. To comply with the regulations, they have the right to ask for proof of income to assess the affordability of a mortgage in all cases when you apply for a regulated mortgage contract. If you are unsure if you will qualify for a mortgage you should always seek advice from a suitably qualified mortgage advisor . Here’s the historic content. We’re leaving it online for the record.

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Some lenders consider self-certification mortgages to be a slightly higher risk than full status mortgages, although there is precious little reason for this: Recent statistics showed that the number of repossessions on self-certified mortgages is no higher than for other types of mortgage.

There are a few differences, however:

• Interest rates are very competitive on self-cert mortgages, but the best deals are harder to find than with mainstream mortgages.
• Many specialist self-certification lenders will only deal with approved independent brokers, not direct with you.
• The most competitive deals are often not available on the high street.
• Even if you have a bad credit rating, competitive self-certified mortgages are still available through brokers.

To read more on this subject please see the list below or your mortgage guide or your home buying guide

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