Top tips for self-cert

If you think that a self-certification mortgage could be the one for you, here are the pro’s and con’s to help you make a decision.

Prove it!

• Self-cert mortgages allow you to ‘self-declare’ what you earn to a mortgage lender, without having to provide proof of income.

• They are particularly useful for those with season jobs, self- employed people, or those who get a high proportion of their income through commission.

• One of the attractions of a self-cert mortgage is that it can enable self-employed and employed people to apply for larger loans than they would get if they provided proof of income and received the standard income multiples offered by most mainstream lenders.

I need more money

• It is recommended to opt for a short-term deal of two or three years. Once the fixed term is over, you may meet the standard lending criteria and be able to switch to a lower rate.

• Remember to be honest, it is a criminal offence to lie about your income when applying for a mortgage and along with a criminal record, you could also end up with mortgage repayments that you can’t afford.

• Many self-cert mortgages offer options to make overpayments, underpayments and to take breaks which allows you to plan for times when your income is less.

Deposits and interest rates

• You may need to save a larger deposit if you choose a self- cert mortgage. The most that lenders offer is usually 85 per cent of the property’s value.

• If you are a second-time buyer, there is the option of a fast-track mortgage, which is similar to self-cert in that you don’t have to prove your income, but you are in a position to put down a 25 per cent deposit.

• Interest rates may be a little higher with a self-cert mortgage, compared to a standard mortgage.

• Consider the implications of taking on a large mortgage at a time when interest rates could rise and if you could cope if your repayments rose.