Get Your Dream Home with a Self Cert Mortgage
Are you a self-employed individual who is dreaming of owning a house? Then self certification mortgage may be the solution you are looking for. Before the emergence of self cert mortgage, an aspiring homeowner has to be employed to be able to get a mortgage for a house. This is because lenders, being the risk adverse individuals that they are, require mortgage applicants to present a proof that they are earning a regular income. These proofs come in the form of the pay slip or a certificate from an employer. Of course, self-employed individuals do not have these papers. That is why, it is almost impossible for them to get a mortgage for a house.
With the advent of self cert mortgages in the 1990s things have changed dramatically for self-employed individuals and small business owners. The scheme has made it possible for them to have their own home.
The only major requirement for a self cert mortgage is a significantly big down payment. This is usually 25% of the total cost of the house. Compared to the typical 5% down payment that regular mortgages require, this percentage is really quite big. But it is still a small price to pay for individuals who have long been waiting to have their own houses.
There is also a good reason why lenders or banks require a huge down payment for a self cert mortgage. It is because they need some assurance for a potentially risky transaction such this. Without a pay slip or an employer’s reference, lenders have no idea how much an applicant is really earning on a regular basis. The down payment is at least an assurance that he is more or less capable of paying the regular amortisation.
Some lenders would also require self cert mortgage applicants to present a bank statement or at least some credit card checks. But most lenders would be content with verification that you are capable of monthly payment.
The rise of self cert mortgage in the UK is credited to the growing self-employed market. In recent years, more and more individual are opting to either work at home or start owning a business. This is very good for the economy since self-employed individuals and small business create opportunities for other members of the population.
Banks and lenders eventually recognised the economic importance of this market and began tailor fitting their products and services to this sector. Most of them even believe that self-employed individuals are more motivated than employees with regards to finishing their mortgage.
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