Mortgage Arrears

To understand the self certification mortgage product it is important to look at the thinking behind lenders when they are considering offering home loans. In order to get a home loan application accepted lenders need to know that payments on the loan can be made. They do this by finding out what your monthly income is and compare it to your monthly payments on the loan you are requesting.

If you are a company employee you can present pay slips or a reference to prove your income. But should you be self-employed you will need to provide other ways of proving what your income is. This is where a self certification mortgage may be necessary. If you have been in business for three years you may be able to provide three years accounts the usual requirement for a self-employed-mortgage. Should you not be able to provide three years accounts you will need to declare your income.

This is what self-certification is in essence. Your lender will need you to prove your income by providing an accountant's certificate, a signed document saying that your income will service the requested loan. Don't be surprised if you need to show business bank statements over a period defined by the lender so that they can look at your gross income.

If you are already paying a home loan you can provide statements to show how reliable you have been. If you are a tenant, ask your landlord to provide you with a reference to show that you have always paid your rent on time. Lender will also carry out a credit score which will look at credit history as well as scoring you on occupation and history. This provides an input to the application process so as well as providing all the above evidence you will need to have a good credit rating as well.

This type of loan is rarely provided for more than 75% of the value of a property, lenders seek to limit their risks. It is therefore necessary to have savings put away to cover a larger than normal deposit when buying property with this type of loan. Some lenders may lend up to 85% of A properties value on a self-certification loan, but this is not the norm.

Self Certification Mortgage :