Self Certification Mortgages

Self Certification Mortgages
These are designed mainly for those who have a sizeable deposit but are unable to show their true earnings, in most cases the self-employed or any person who has an irregular income. For example, people with seasonal jobs like tourism or those whose income is largely commission based.

When applying for a mortgage one is normally asked to declare your earning and to provide three years' accounts. Lenders will want to see net profits however often accounts are produced to save tax. This contradiction has lead over the last ten years to the introduction of self-certified mortgages.

Lenders will often require a large deposit in excess of 70 per cent of the value of the property, although these figures do vary. Interest rates are slightly higher to represent the risk posed by the loan.

Source: MoneyHighStreet