Self Certification

If you are self employed or are a contract worker, it can prove more difficult to obtain a mortgage and in most situations major high street lenders simply will not consider you. This is where a specialist Mortgage Broker can help, as whilst there are lenders who will consider you, there are fewer around because of the 'Credit Crunch' and lack of mortgage funding and they tend to be 'specialist' lenders who do not have branch networks and so are difficult to locate.

Lenders generally wish to see three years audited accounts to prove income and stability, which makes it difficult if you have only recently started your business. There are some mortgage companies who will consider less than three years accounts but they may restrict the amount that they are prepared to lend. Many self employed applicants have difficulty in proving their income via accounts and this can present problems when looking for a mortgage. Lenders' rules can make life difficult too for people with multiple incomes and those who take home much of their pay as bonuses or commission. Traditionally, lenders have asked for an employer's reference and considered only the basic salary when working out how much they were willing to lend.

Until recently a few lenders would help in these situations by offering a self-certification mortgage - and this kind of deal had made life much easier for the self-employed and employees alike. Self-certification meant that instead of using employers' references or audited accounts, lenders look at a borrower's ability to manage the loan.

A recent consultation paper by the Financial Services Authority however, has made it clear that due to some of the misuse of self-certification lending in the past, it intends to outlaw self certification mortgages. Whilst only a consultation paper at the moment, many lenders have reacted by ceasing to offer self-certification mortgages.

This means that using the services of an independent 'whole of market' broker such as MAPS Mortgages is even more important for self emplyed and multiple income applicants. A broker will know which lenders will have a more flexible attitude and therefore may be able to help the self employed.