Are Self-Cert Mortgages Still Available?

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Are Self-Cert Mortgages Still Available? 

Here at Choice Finance, people often ask us about self-certification mortgages – yet these products haven’t been available from UK lenders for more than a decade. 

Although they’re seen as an easy way to get a mortgage, particularly for the Self-Employed, we can show you much safer ways to buy a home. 

What are self-cert mortgages?

Self-certification mortgages were once a way to buy property without proving income. Applicants signed to confirm their earnings and that they could afford to meet the monthly mortgage repayments. 

Why aren’t they available?

UK financial regulators banned self-cert products following the credit crunch. The 2007/08 financial crisis resulted from ‘subprime’ lending, where providers had offered credit, mortgages and loans to people who couldn’t afford to pay them back. 

With self-certified mortgages there were no checks on applicants’ income, so it was very easy for people to borrow beyond their means. It’s why these products became known as ‘liar loans’ in the US and UK mortgage markets. High numbers of interest-only mortgages were also a factor in the credit crunch.

Once the regulators stepped in, mortgage lenders began assessing affordability for all potential clients – and now everyone must prove their income for any mortgage product.

Can I get a self-cert mortgage from overseas? 

It is still possible to find lenders offering self-certification mortgages based overseas, but the Financial Conduct Authority strongly advises against these products. 

There’s much less protection if you sign up with a lender from outside the UK – so you could be exposed to unfair practices, high interest rates, hidden fees and other unpleasant surprises. 

What are the alternatives to a self-cert mortgage?

There are lots of alternatives to a self-cert mortgage. Self-Employment is no longer a barrier to buying a home and almost every high street lender accepts people who work for themselves, who run a limited company or operate as freelancers or contractors. 

Just talk to a Mortgage Adviser – it’s our job to explore the market for mortgage deals to suit your situation.

The main step towards getting a Self-Employed mortgage is proof of income. You need documents that evidence your annual earnings, such as tax records or annual accounts. Mortgage lenders will accept some or all of the following as income:

  • Salary and dividends
  • Share of net profit
  • Investment income
  • Rental income
  • Pension income

How can a Mortgage Broker help you?

Self-cert mortgages just aren’t relevant in today’s mortgage market, and Choice Finance will help you find the most suitable mortgage and lender for you, looking at both traditional mortgage products and more flexible options. Our Mortgage Advisers will support you through the mortgage application process and beyond.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.  

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.