Hi, my name is Morgan Miner and I am a finance expert. As someone who is passionate about helping people make informed financial decisions, I have created this article to provide people with a better understanding of self-certification mortgages.
The Problem with Self-Certification Mortgages
In the past, self-certification mortgages were readily available to those who were self-employed and had difficulty proving their income. However, these types of mortgages have been linked to a number of issues, including irresponsible lending and fraudulent activity. As a result, they are no longer widely available and have been replaced by alternative options.
The Solution: Alternatives to Self-Certification Mortgages
While self-certification mortgages are no longer widely available, there are still options available to those who are self-employed and looking to secure a mortgage. Some of these options include:
1. Specialist Lenders
There are a number of specialist lenders who are willing to work with self-employed individuals to help them secure a mortgage. These lenders will typically require proof of income, but may be more flexible when it comes to the type of documentation they accept.
2. Mortgage Brokers
A mortgage broker can help you navigate the mortgage market and find lenders who are willing to work with self-employed individuals. They can also provide guidance on the types of documentation you will need to provide to secure a mortgage.
3. Government Schemes
There are a number of government schemes available to help first-time buyers and those who are struggling to secure a mortgage. These schemes include Help to Buy, Shared Ownership, and Right to Buy.
4. Increased Documentation
If you are self-employed, you may need to provide more documentation than someone who is employed when applying for a mortgage. This can include tax returns, bank statements, and invoices.
5. Improved Credit Score
Having a good credit score can make it easier to secure a mortgage. As a self-employed individual, it is important to keep your finances in order and maintain a good credit score.
6. Alternative Income Sources
If you have alternative income sources, such as rental income or investments, this can help you secure a mortgage. Be sure to provide documentation to support these income sources.
Success Story
John had been self-employed for several years and was struggling to secure a mortgage. He worked with a mortgage broker who was able to find a specialist lender willing to work with him. With the help of his broker, John was able to provide the necessary documentation and secure a mortgage on his dream home.
Frequently Asked Questions
1. Can I still get a self-certification mortgage?
No, self-certification mortgages are no longer widely available.
2. What documentation do I need to provide to secure a mortgage?
If you are self-employed, you may need to provide tax returns, bank statements, and invoices as proof of income.
3. What are the alternatives to self-certification mortgages?
Alternative options include specialist lenders, mortgage brokers, government schemes, increased documentation, improved credit score, and alternative income sources.
4. Will having a good credit score help me secure a mortgage?
Yes, having a good credit score can make it easier to secure a mortgage.
5. Can a mortgage broker help me secure a mortgage?
Yes, a mortgage broker can help you navigate the mortgage market and find lenders who are willing to work with self-employed individuals.
6. What are government schemes?
Government schemes include Help to Buy, Shared Ownership, and Right to Buy.
7. What is Shared Ownership?
Shared Ownership is a government scheme that allows you to buy a share of a property (between 25% and 75%) and pay rent on the remaining share.
8. What is Right to Buy?
Right to Buy is a government scheme that allows council tenants to buy their home at a discounted price.
Pros of Self-Certification Mortgages
While self-certification mortgages are no longer widely available, they did provide a way for self-employed individuals to secure a mortgage without having to provide extensive documentation.
Tips for Securing a Mortgage as a Self-Employed Individual
1. Keep your finances in order
2. Maintain a good credit score
3. Be prepared to provide extensive documentation
4. Consider working with a mortgage broker
5. Explore alternative income sources
Summary
Self-certification mortgages are no longer widely available and have been replaced by alternative options. If you are self-employed and looking to secure a mortgage, there are still options available to you, including specialist lenders, mortgage brokers, and government schemes.