Self Cert Mortgages

A Self Certification mortgage is a mortgage offered on the basis of you stating what your likely income will be, rather than providing documentary evidence. They tend to be a mortgage product required by those who are self-employed or have erratic earnings.

You may have to ask an accountant to back up your statement. If you have more than two - and, in many cases, three years' worth of accounts, then you should be able to just apply for a standard mortgage.

The market is becoming more competitive and deals are therefore improving. You are still likely to pay more but there should still be the opportunity to switch to a better rate - and even to another lender a few years later.

You are asked to pay a higher rate because statistics show most businesses fail within the first two years of trading. If you are left with heavy debt there is a possibility you could lose your home.

Some self-certification mortgages are better than others and if cash flow is a problem it is worth checking out those that offer payment holidays and the facility to pay more when you can. It may well be worth seeing a broker such as 1st Mortgage Line as they can explain any intricacies.

Whereas standard mortgages typically offer a 95% loan to value, self-certification mortgages almost always require a higher deposit: a loan-to value of 90% and more commonly 75% is usually offered.