Self-Certification Mortgage

Self-certification mortgages, otherwise known as self-certificate or self-cert mortgages are designed for self employed people who cannot prove their income. With a self-certification mortgage you are asked to declare your income in the application form but no formal check will be conducted. People who rely mainly on commission for income and people who are on short-term or part-time contracts can also use self-certification mortgages. Business owners who have no salary and cannot prove their income, because they have little, or no audited accounts can also make use of self-certion mortgages.

You do not need to supply information about salary or accounts with a self-certification mortgage. Instead of using salary, accounts or bank statements the lender will just check your past records and of course conduct a credit check. The interest rate charges should be slightly higher than a regular certified mortgage but not too much higher, unless you have a bad credit history. If you are self-employed but have 3 or more years of audited accounts you are likely to get a better interest rate. If you request a particularly large mortgage the lender may request to contact your accountant if you have one.

The interest rate options available for a self-certification mortgage are the same as for a regular mortgage, which means you can probably get a promotional discount rate for a fixed period. If your income is based on the profits of your business it is probably a good idea to get a flexible mortgage so you can pay more when profits are good and possibly even borrow back when profits are low.