An Overview of the Self Cert Mortgage: What You Need to Know

The self cert mortgage is something along the lines of a godsend for an entire class of people.  Historically, people who were self employed or who owned their own business found it rather challenging to apply successfully for a home mortgage loan.  With the self cert mortgage, the burden upon a self employed individual or business owner lessened in regard to applying for and obtaining the financing he or she needed to purchase the home of his or her dreams.

The self cert mortgage is a type of home loan financing through which the typical array of supporting documentation that accompanies a home mortgage loan application does not need to be produced.  For example, when it comes to applying for home loan, an applicant normally will need to present to the lender paychecks going back over a specified period of time. 

Obviously, if you are self employed or if you own your own business, you will not be the recipient of payroll checks in the more traditional sense.  Therefore, this is an otherwise crucial piece of documentation that you will not be able to provide to a lender as part of the application process.

Along these same lines, when you are a business owner or when you are self employed, you will not necessarily be able to demonstrate a constant stream of income in the same way a person who is traditionally employed can do as part of the home loan application process.  Generally speaking, a home loan lender wants a potential borrower to be able to demonstrate a constant and reliable stream of income through employment.

Finally, through the traditional home loan application process (as opposed to the self cert mortgage process) a third party (normally the employer) is able to verify a potential borrower's income.  When a person is self employed or owns his or her own business, there is no third party verification process.

Through a self cert mortgage, a business owner or someone who is self employed is given the ability to “certify” his or her “self” his or her financial situation, is given the ability to provide appropriate documentation in support of his or her self cert mortgage application.

For example, a person who is involved in applying for a self cert mortgage can provide documentation that includes bank statements and income tax returns.  In addition, in many instances financial documents related to the business a person owns may also be brought to the table when applying for a self cert mortgage loan.  In the end, through a self cert mortgage application process an potential borrower is given a broader opportunity to demonstrate his or her financial worthiness.

The reality is that the self cert mortgage application process and loan allows a person who otherwise might be precluded from obtaining a home loan the ability to obtain this type of financing.  Indeed, with more and more people heading into self employment or establishing their own businesses, the self cert mortgage really is becoming the wave of the future.

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