Self certification mortgages

Self certification is a broad subject and covers many circumstances and principally 3 levels of proving,….. or not, your income.

Many people who are employed need to self certify their income because they are paid a low basic or no basic salary and a significant part of their income is commission or bonus based. Many people have more than 1 job. Some make up a great deal of their income from overtime. There are those people who are contracted and do not have conventional wage slips. Directors who are paid a very low basic salary but are principally remunerated from dividends and of course those who are self employed.

With a self certified mortgage you also have the full range of mortgage products available, such as fixed rate, trackers, discounted. Currently the most popular request is a 2 or 3 year fixed rate and is readily available with self certified mortgages.

There are also 3 levels of self certifying your income –

1. True self cert
2. Verification of income
3. A full set of accounts

The most basic and simplistic self certification. You merely sign on the application form to confirm your income. You are not required to produce any accounts or bank statements. You are not required to provide any evidence of an accountant. As you may expect, with such minimal confirmation of income, you can expect to pay a little more interest for a true self cert mortgage. These are available to employed and self employed.

You require a chartered or certified accountant for this type of self cert. What would happen is the lender would contact your accountant and ask him or her 2 simple questions –.

• Does the accountant know you?
• Can the accountant verify that you are able to pay the mortgage?

So long as the accountant can answer ’yes’ to both question, that is all that is required. No accounts are required, infact the accountant is not required to confirm anything in writing. Again, available to employed and self employed.

If you can demonstrate your income with accounts and backed up with bank statements, this will earn you the most attractive self certified mortgage rates. If this level of information is available for the last 3 years, it may be possible to achieve a full status interest rate rather than self cert. For this you will require –

• Accounts prepared by a certified
  or chartered accountant
• Preferably 3 years of accounts
• Bank statements

Whilst this type of self certification is available to both employed and self employed it is more common to have self employed able to produce trading accounts. However, many directors can produce the required accounts.

The more information you can provide, the more confidence you can give to the lender, will result in more favorable interest rates. There is no right or wrong over which one to choose, simply choose the one you feel most comfortable with.

Todays best deals
Type	Rate	Period	LTV	Notes
Tracker	4.39%	3Yr	85%	No Extended tie-in
Fixed	4.77%	2Yr	85%	No extended tie-in

*Taken from TRIGold