Self Cert Mortgage Benefits Self-Employed
Self cert mortgage is a good solution for self-employed individuals who cannot acquire a regular mortgage. In recent years, an increasing number of individuals in the UK have started working on their own. This trend is caused by the uncertainties experienced by the UK job market today. For most parts, the increase in the number of self-employed individuals is a good thing since, statistically, it means that the number of unemployed individuals are decreasing. Working for oneself should be encourage because it creates opportunities for more individuals and is generally good for the economy. Problem is, without a regular pay slip to present, self-employed individuals find it almost impossible to acquire a mortgage. This is where a self cert mortgage comes in.
The difference between a regular mortgage and a self cert mortgage is that to acquire the former, you will need physical proof of your income or earnings in the form of a pay slip or certificate from your employer. Traditional lenders need this kind of assurance for them to make sure that you have the ability to pay. This is why without proof of income – as in the case of self-employed individuals. It is difficult to get a mortgage.
With a self cert mortgage, you will not be required to present a pay slip or certificate from any employer. What you will have to do is make a certification that you are expecting to earn a certain amount of money for a particular time period. If necessary, the only physical proofs that you would have to bring can come in the form a statement from your accountant, if you are serviced by one, or a bank statement.
The emergence of self cert mortgage is credited to the fact that, in recent years, more and more lenders have started to recognise the self-employed market. Indeed, self cert mortgage come as a blessing for self-employed individuals who want to own a house.
Self cert mortgage has its disadvantages though. For one, it usually has a higher interest rate than regular mortgages. Self cert mortgage lenders put a high interest rate to offset the possible losses as posed by the higher risks involved in lending individuals with no regular income.
Even though self cert mortgages have become popular in recent years, it is still quite difficult to find a lender that offers this kind of mortgage. If you do find one, you will probably have to put down a high deposit.
Despite its disadvantages, self cert mortgage is still an excellent solution for self-employed individuals who want to acquire their own houses. For some, it may even be their only hope to get their dream home. And if the self-employed market continues to grow in the years to come, you can be sure that more and more lenders would offer self cert mortgages.
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