A guide to self-cert mortgages
Many mainstream lenders ask self-employed applicants to supply three years’ of audited accounts when applying for a mortgage.
If you haven’t been self-employed for this time then you won’t have the necessary paperwork to prove what you are earning.
Even if you do have full accounts your accountant is likely to minimise the amount you declare as income for tax purposes.
So when a lender looks at your accounts, its assessment of how much you can borrow may be based on an income that doesn’t reflect your ability to pay.
But all is not lost. Many specialist lenders and some mainstream lenders offer self-certification mortgages where you state your level of income without having to provide any accounts.
There are two levels of self-certification; some lenders will accept a letter from you declaring your income and some require a letter from your accountant stating that your business is solvent.
There are a handful of lenders that will offer you a self-certification mortgage if you have a poor credit history, but expect to pay a higher level of interest on the loan.
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Date: 2nd, April, 2006
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