Self cert Mortgages

GingeG

Ok guys Im confused now

I know you studied hard to get your CeMAP so can someone please explain to me in simple terms:

a. Can I get a self cert?
b. Can you recommend anyone?

And quotes like "please make sure you meet the lenders criteria" are no good to me, as I have already stated what position I am in at the start of the post. I am a newly appointed director in a Ltd Company in its first year of trading.
So what are my options? Could I get a normal mortgage on normal rates if I had a guarantor for example?

toonfish

very few lenders will allow you to self cert with less than 1 years trading. Kensington will, Freedom Lending, possibly Standard Life - much depends on ypur credit score.

If you have less than 25% shareholding then you may be able to apply on an "employed" basis whereby normal lending criteria will apply.

herbiesjp

GingeG wrote:

And quotes like "please make sure you meet the lenders criteria" are no good to me, as I have already stated what position I am in at the start of the post. I am a newly appointed director in a Ltd Company in its first year of trading.

On the contrary, those words are very importanmt to you.

Should you apply and run credit checks against the lenders mentioned by the other posters (apart from Toonfish) you will get declined and have had a credit check run unnecessarily against your name - too many of those could cause problems with your credit score.

If you are going direct, you will need to know thier criteria, otherwise how will you know they can agree a mortgage for you?

HTH

Col.Mastard

toonfish wrote:

As Herbie has stated, tread warily. Some of the options above are fast track, not proper self cert

What's the difference?

toonfish

Col.Mastard wrote:

What's the difference?

self cert you declare your own income, does not have to be proved or verified. Fast track the lender has the right to make enquiries of your employer or accountant.

AndrewSmith

Col.Mastard wrote:

What's the difference?

Fast Track:
A full status application made to the lender. If the case attracts a very high credit score and the income looks acceptable etc then they may accept the case on Fast Track. This merely means that the lender may not ask for further income proof or other documentation. The common perception is that it is a replacement for self certify, which it is not. The feature of not providing evidence with this product does not apply only to income, it also applies to bank statements, identification etc. That is why it is only offered to the higher credit scores. To attract a higher credit score you must fit certain criteria, length of time in your current job is a contributing factor. For the benefit of both you and the lender to enable fast processing of good low risk lending.

Self Cert:
An application made on the understanding that audited accounts for your business, or (in the case of a commission only salesman employed) consistant payslips are not available. Usually because the business has only been running a short period of time etc.
Full underwriting still applies to such applications as does an income multiple/affordability calculation to determine the lending available. Self Certify does not change the amount you earn, nor does it alter your employment status. The lender still reserves the right to request any proof or evidence it sees fit. Usually applicant's status are verified via their NI number at the inland revenue to prove whether self employed or employed. If this information is inconsistant with the application form then it is not unheard of for the lender to insist on some form of income verification such as cash books, sales ledger etc.

They are often confused but are completely different. There are also some lazy brokers that will recommend one in place of the other. Not good.

At the end of the day you should never take forgranted that you will not be asked for some form of income evidence. Self Cert only means that you do not have to provide audited accounts. The lender may still (and regularly do) ask to see bank statements showing money going in etc.

Used correctly both types are an excellent tool for both the adviser and the customer.

molly22

i work part-time and also get a widowed mothers allowance.
with my low income i managed to get a self cert mortgage for £156k.

i now wish to move house and believed the mortgage to be portable, but have been told now it is not.
as the IFA rules have been tightened recently, do u think i will be able to get a new self cert mortgage for a similar amount?

thanks for any help on this

molly

herbiesjp

molly22 wrote:

i work part-time and also get a widowed mothers allowance.
with my low income i managed to get a self cert mortgage for £156k.

i now wish to move house and believed the mortgage to be portable, but have been told now it is not.
as the IFA rules have been tightened recently, do u think i will be able to get a new self cert mortgage for a similar amount?

thanks for any help on this

molly

What is your income?

LisaT186

GingeG

It may be possible, there are two lenders that are springing to mind that don't require a minimum length of self-employment, both though are only available through a mortgage broker and not anything you could access directly. The majority of lenders will class you as self-employed even if the company 'pays' you each month if you are mre than a 20% shareholder.

You will probably pay a little more on rate, but not hugely. 3 year fixed for example from 5.99% to 6.14% if it all fits. You will have to declare an income, even though you have 3 years worth of payments set aside, your income must be adequate to sustain the mortgage.

molly22

thanks herbie,

my actual income is only @ £15,000, but i share with my mum whose income is @ £13,000.
we have supported the current mortgage of £156,000 for the past five years, without any trouble.

grateful for any help
thanks
molly