'True' self certified mortgage?!

JennyBratz

Can anyone advise me of a 'true' self certified mortgage please? I have contacted three 'so-called' self cert mortgage companies and all have said I can have a mortgage but only if they can contact my employers! What's self certified about that??? I have a good credit score (and have never defaulted on mortgage, loan or credit card) but I have several loans and credit cards which I intend to pay off with a new mortgage. I wish to borrow about 60% of the value of my house. Any suggestions please?

AndrewSmith

The first thing about Self Certify is that it does not change the amount you earn. Also you still have to declare all your loans etc, however if it is your intention to repay these from the new mortgage the new lender will not penalise you on the amount you can lend because of the outstanding amounts.

Why would you need to self certify if you are employed? The only situation where self certify is suitable for an employed person is if they are paid mainly in commission thus do not have a basic salary figure that reflects their true income.

If you are salaried but the lenders will not go as high as you want, maybe you are asking for too much?

What sort of figures are we looking at? With a bit more info I could be more precise.

Andy

JennyBratz

Thanks for the reply. I have declared all my loans etc and, apparently, my credit rating is good. The reason I want a self certified mortgage is that my employed earnings are only part of my income. I also have non-guaranteed overtime (which I've had for 6 years) and two part time self employments. I wish to borrow 177,000 and the house is valued at 300,000. It's a remortgage as I already live in the house but I bought it with a bridging loan because I had not sold my house (although it is now sold).

AndrewSmith

Hi,

Thanks for that. Yes, that seems a valid enough reason for self certifying.

There are many lenders who offer true self certs, and the rates are comparable with full status products as well.

An example would be Norther Rock who offer a self cert range called 'Non verification'. Watch their fees thoug, they can be a bit steep.

There are so many it's impossible to list them all but, in answer to your question, yes they do exist and yes they are reasonably simple.

Andy

JennyBratz

Thanks. I'm now worried that the 3 companies I have contacted so far have all carried out credit searches on me. Will this affect my future credit score?

ksh123

this is an interesting discussion for me as I expect to be in a similar position soon i.e. needing a self-certified mortgage so I'll tag on if you don't mind Jennybratz.

Also, andrew, re self-certified secure loans do companies like Northern Rock or other BS do those too? And are the interest rates for both the self-cert mortgages and secure loans always a lot higher than those for certified lending? e,g, I was quoted 12.5% on secure loan of £17k because of self-certification. That seems a heck of a lot but I don't know if we are at the lenders '"mercy" because of self-certification?

sorry, that seems like a lot of ??

stanmoresaver

ksh123 wrote:

this is an interesting discussion for me as I expect to be in a similar position soon i.e. needing a self-certified mortgage so I'll tag on if you don't mind Jennybratz.

Also, andrew, re self-certified secure loans do companies like Northern Rock or other BS do those too? And are the interest rates for both the self-cert mortgages and secure loans always a lot higher than those for certified lending? e,g, I was quoted 12.5% on secure loan of £17k because of self-certification. That seems a heck of a lot but I don't know if we are at the lenders '"mercy" because of self-certification?

sorry, that seems like a lot of ??

Self- Certification/ limited referencing (fast-track) basically one and the same nowadays-

If you are employed, i would have the same reaction as Andy above, however, your reasons seem plausible. If you were a client of mine, i would still try and package it to a non- non-status lender.

Don't muddle self certified secured loans, where the amounts are lower, risks even more, and the need for profit the same, with self certified/ fast-tracked mortgages. On a residential mortgage, the rates should be straightforward, not the very best but not of the level you talked about.

HTH

SS

herbiesjp

Have to agree with SS - I would look at positioning the case with a status lender first.

There are plenty of lenders that will try very hard to agree your case even if it is not straight forward - what you will need though is a good broker who has the knowledge of the lenders and their criteria to do this.

AndrewSmith

I think the average person would be very surprised at just how many lenders will now accept self certify.

As said above by my learned friends it is best to have a word with a good broker who's knowledge of the market will be invaluable when looking to correctly place the case for you.

I do deal with a lot of self employed people, consequently self cert if something that I come across very frequently. I have to say that around 80% of those cases are placed at high street rates with a mainstream lender wiht no adverse effect or penalty reflected in the rate etc for the client.

It sounds to me as though you have applied in the past for a 'fast track' mortgage where the income is not usually verified below 75%, however they will under fast track, contact your employer to verify a) that the employer exists, abd b) that you work there. They do also reserve the right to verify your income (read the small print on the application, it states that by signing you give authority for the lender to carry out any referencing it sees fit in conjunction with your mortgage application).

With self cert this does not happen. You sign an affordability declaration which states that you are declaring your income as 'x', and that failure to provide an accurate figure is fraud and you will be prosecuted. They are a jolly bunch these lenders however I support fully the policy of never overstating your income.

Hope this helps

Andy

stanmoresaver

AndrewSmith wrote:

however they will under fast track, contact your employer to verify a) that the employer exists, abd b) that you work there. Andy

And this my learned "ever so regular" friend is the issue, i feel.

With no inference to the original poster, it is either that this hasn't been explained properly, or isn't possible. That, for loans under 75% LTV, is the overriding reason, why applications like this stumble.

SS

AndrewSmith

Couldn't agree more my 'soon to be ever so regular' friend.