Darren Polson of Aberdein Considine will be answering our readers’ questions in one of our weekly Ask the Expert slots. This week he explains why self-certified mortgages are no longer available and offers alternative solutions
The Question
Is there anywhere in Europe in which self-certified mortgages are still available as I’d very much like to get one?
Darren’s Answer
Self-certified mortgages, commonly known as self-cert mortgages, were designed for individuals who found it challenging to prove their income through conventional means, such as self-employed individuals, freelancers, or those with irregular income streams.
Under this arrangement, borrowers could declare their income without the need for extensive documentation, thus simplifying the mortgage approval process.
However, due to the high risks associated with these loans, particularly the potential for borrowers to overstate their income, self-cert mortgages were banned in the UK following tighter regulations introduced by the Financial Conduct Authority (FCA).
Despite the ban in the UK, those interested in self-cert mortgages may still find opportunities elsewhere. Some European countries may offer similar products through specific lenders. However, these options are often limited and come with stricter criteria and higher interest rates.
It’s crucial to research thoroughly and seek advice from a mortgage broker who is well-versed in the international mortgage market. They can provide insights into available products and help you navigate the complexities of obtaining a mortgage abroad.
Alternatives to self-cert mortgages
In the UK, although self-cert mortgages are no longer available, there are alternatives for those who cannot provide traditional proof of income.
Lenders might accept a variety of documents, including shorter trading periods, income projections, and accountant certificates.
Additionally, there are specialist lenders who might consider your unique financial situation, though these options often come with higher interest rates.
Engaging with a knowledgeable mortgage broker is essential, as they can access a wide range of mortgage products and identify the most suitable options based on the latest lending criteria and your specific circumstances.
They can guide you through the documentation required and help present your case to lenders in the best possible light, increasing your chances of securing a mortgage that fits your needs.
Furthermore, a broker can keep you informed about any changes in the market or lending policies that might affect your eligibility for different mortgage products.
Meet our expert…
Darren Polson is head of mortgage operations at Aberdein Considine. He has been writing a regular column for What Mortgage for over two years and is now here to answer YOUR questions.
If you have a question for Darren please email kate.saines@emap.com or leave a message in the comments below.
