Are Self-Cert Mortgages Still Available?

Are Self-Cert Mortgages Still Available? 

You may have heard people talk about self-certified mortgages, especially in connection with Self-Employed people. The question is, are they still available in the UK today?

What are self-cert mortgages?

With a self-cert mortgage, you don’t have to supply any proof of income to a mortgage lender. You simply state your annual income and sign to ‘certify’ that the amount is accurate.

These products targeted people who found it difficult to prove that they had a steady, stable income. Typically, these were the Self-Employed and small business directors. At the time, these types of mortgages were the only option allowing these people to buy a home.

Why aren’t they available now?

After the credit crunch in 2008 the Financial Conduct Authority conducted a major review of the mortgage market, to crack down on substandard practice and risky lending. Self-cert mortgages were one of many mortgage products removed from the market.

The credit crunch was largely the result of ‘sub prime’ lending – where unscrupulous financial providers increasingly took on borrowers who lacked the income to repay their mortgage.

Today, mortgage lenders have to assess every customer on whether they can comfortably afford the repayments. This means that all borrowers have to prove their income.

Getting a self-cert mortgage overseas 

If you search ‘self certification mortgages’ online you may come across overseas lenders offering loans with no proof of income. Unsurprisingly, the FCA formally warns against these products. 

Overseas mortgages like these are risky. There are no routes for complaint or reporting bad practice, interest rates are likely to be very high and there may be hidden fees and charges. 

You should certainly seek mortgage advice before resorting to an overseas mortgage. UK lenders are much more accommodating on Self-Employed mortgages today and you’re likely to find a safer deal that way. 

What are the alternatives?

Getting a mortgage is much easier for Self-Employed people these days – it’s just a question of getting some documents together and finding a suitable lender. They will accept many different forms of income including: 

• Salary and dividends
• Share of net profit
• Investment income
• Rental income
• Pension income

Talking to a Mortgage Broker makes the process simple and stress-free. We will confirm the proof of income a lender requires, but typically you will need two to three years’ accounts, recent self-assessment forms and bank statements. 

How can a Mortgage Broker help?

Mortgage Brokers like Momentum Mortgages are financial professionals who are dedicated to the mortgage market. We compare hundreds of products across dozens of lenders to find the most suitable options for every client.

A big benefit of working with us is that we can access providers that are only accessible through brokers – and these are often highly suitable for the Self-Employed, for Buy to Let mortgages or people with credit issues. 

We don’t just find you a mortgage deal, we’ll help you throughout the mortgage application and beyond with advice and support every step of the way. 

Momentum Mortgages is a trading name of Embrace Financial Services which is an Appointed Representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority (FCA) for mortgages, protection insurance and general insurance products. We are registered in England.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP THE REPAYMENTS ON YOUR MORTGAGE