self certification - non conforming mortgage

bob60

i am looking to remortgage my existing property in order to release funds. i have been reading about self certification and non conforming mortgages as i would like to borrow more than my salary would allow me to with a regular lender.
could anyone please recommend a lender? i read that chelsea building society, and alexandra hall deal with these mortgages.
do they require proof of income if it is self certification?
any information would be greatly appreciated
thanks

AndrewSmith

Self certify will not change the amount you can borrow, the lenders will still apply similar multiples to your income whether you self certify or not.

Self certify exists for those who cannot legitimately prove their income, ie self employed in the early years of trading, or an employed person paid mainly on commission thus very low guaranteed salary. It is not there to make it possible to borrow more than your salary will allow. That's called fraud.

Also lenders who operate self certify reserve the right to ask for verification of any details they see fit. It is not unheard of for a self certify lender to actually contact the inland revenue to verify your income and employment status using your national insurance number. It all depends on whether they smell a rat or not. After all, they are lending money, and have no obligation to actually give you anything, and can refuse an application for any reason.

Alexander Hall are, in fact, not a lender but a broker. The Chelsea are indeed a lender and do offer self certify mortgages. They are not the most competitive in the marketplace though.

Simply using self certify as a means of borrowing more than you salary will allow is wrong, and can land you in a whole heap of trouble if you are caught (There are brokers and clients from before the regulatory days serving 10 years at her majestys pleasure for exactly that.)

Although they may not initially ask for proof of income you will sign a declaration which is legally binding and will stand up as evidence in court, stating your employment status and what your earnings are. IF employed you do also have to provide your employer's details and the lender reserves the right to take up any references it sees fit. This is ststed in the declaration on the application form, you are giving the lender authority to take up any appropriate references it wishes.

Tread carefully, the eventual cost could outweigh the benefit of the re-mortgage.

Andy

bob60

thanks for your reply
i was not looking to lie to a lender or to do anything illegal. i took out a mortgage in 1997 with bank of scotland, this was called a non status mortgage. they did not ask or check how much you earn. i just wondered if there are any lenders who operate like that now.

the current multiples of salary are ridiculous, especially in london where property prices are so high. i have had many mortgages over the past 25 years, in 1989 the interest rate was about 15%, treble what it is now, yet you could still borrow the same multiples of salary as now!!!
also they go on about affordability, yet the fact that i do not drink, smoke or run a car, let alone have kids, does not get taken into account.

i am 45, i have an excellent credit record, no debts or credit cards. i now own a property valued at £600,000 outright. i have been in my present job for 9 years and earn £30,000 per annum. it is outragous that no mainsteam lender will give me more than 4 x my salary as a mortgage, in order to release equity. they all seem to stick to a script and not to take personal circumstances into account.

AndrewSmith

Hi Bob,

Thanks for the reply and for not taking my comments personally, as they were not meant to be.

There are mainstream lenders that will lend more than 4x income but it does depend on the situation as a whole.

How much are you looking to raise against the property?

Andy

bob60

hi andy
i am looking to borrow 200K. i know that sounds a lot but i can easily afford the repayments. i have consistantly made overpayments on previous mortgages. i would even be willing to take an interest only mortgage, as this is a short term thing, 2 maybe 3 years maximum. after that i plant to sell my existing property in order to downsize, and to once again become mortgage free.
/bob

jonboy31

I don't know if this helps you, but I used to play fruit machines for a living and got a self certification mortgage from Birmingham Midshires, they only asked what I did and what I earned, no proof was asked for. I also had a 25 percent deposit which was in my favour for a mortgage like this. In all honesty, so long as a mortgage provider has enough of a deposit, I dont see a problem for you (so long as you can afford the repayments of course)

John

homer_j_3

bob60 wrote:

thanks for your reply
i was not looking to lie to a lender or to do anything illegal. i took out a mortgage in 1997 with bank of scotland, this was called a non status mortgage. they did not ask or check how much you earn. i just wondered if there are any lenders who operate like that now.

the current multiples of salary are ridiculous, especially in london where property prices are so high. i have had many mortgages over the past 25 years, in 1989 the interest rate was about 15%, treble what it is now, yet you could still borrow the same multiples of salary as now!!!
also they go on about affordability, yet the fact that i do not drink, smoke or run a car, let alone have kids, does not get taken into account.

i am 45, i have an excellent credit record, no debts or credit cards. i now own a property valued at £600,000 outright. i have been in my present job for 9 years and earn £30,000 per annum. it is outragous that no mainsteam lender will give me more than 4 x my salary as a mortgage, in order to release equity. they all seem to stick to a script and not to take personal circumstances into account.

There are lenders that dont use standard income multiples to asess affordability. They use your net monthly income, minus off your regular outgoings such as utilities, loans, council tax etc and then the amount of the monthly payment you will be paying and if 40% (or a different %) of your disposable income is still left then they say that its affordable.

This works great for people with lots of disposable income and makes sense if you think about your situation and someone who earns 50k with loads of outgoings etc..

I am not sure if I can name the comapnies that do this but I belive Skipton Building Society do this and Direct Line (I think) are 2 of these companies. I am sure if you call them and ask how they assess affordability then you wil find out. I am not sure if they advertise this on their website so give them a call.

In any event, get yourself to a broker for some advice which may be more relevant to your circumstances etc.

bob60

thanks for the repy's
can anyone reccommend a good broker in the london area?
regards
/bob

stanmoresaver

Whereabouts in London?

bob60

i am in the islington area

AndrewSmith

I know a guy in N london, very good, very straight down to earth. I'm sure he would be happy to have a provisional look at it for you.

(No, it's not me lol)

Andy