Self certyfying mortgage

rach!_3

hiya well as some of you will know from other posts over the last few days we are looking at buying our own home
i was talking to someone today at school who suggested we might think about self certyfying mortgages, can you tell me how these work and what are the criteria
also i was advised if we are going to buy we should do it soon, because apparently no one will be buying by the end of the year due to propery prices getting so high, can anyone shed any light on this one as well please and thank you

Doozergirl

Self certification would be approproate for somenone who is self-employed, for example, and cannot provide full accounts. Is that your case?

If people 'stopped buying' at the end of the year because of prices rising, prices would simply stop rising and then they might start falling. But that's hardly a reason to buy now!

I think you've been talking to someone who *thinks* they know what they're talking about

ajaxgeezer

Rach, I have one self-cert mortgage and it's essentially no different to any other in that you pay it every month when you say you will.

It's not a scratters mortgage like some people have said over the years, it's a product to suit people who find themselves in a unique financial situation eg self employed with missing history, to fund a BTL which you are happy to make an initial loss etc.

Rick62

SElf cert mortgages are suitable if you are self employed and either don't have good accounts or your past figures are not at your current and future levels. They typically are about 0.5% higher than a status mortgages, but otherwise are the same and are arranged from the same lenders (eg, Bank of Scotland, BM Solutions and many others).

Generali

Be warned - lots of people have taken these out for more than they would otherwise be able to by 'exaggerating' their income a little.

In the US, where property prices are falling and rising interest rates have caused people to default, it has become apparent that people were exaggerating their income to get mortgages. These people face imprisonment for fraud.

Generali

ajaxgeezer wrote:

It's not a scratters mortgage like some people have said over the years...to fund a BTL which you are happy to make an initial loss etc.

No idea what a scratter is (showing my age probably) but self certification mortgages aren't meant to be used to hide losses on BTL or to exaggerate income.

People that have done this (and I'll bet there are loads) are going to find that if house prices tank and their investment goes belly up there'll be people from the lending institutions taking a very dim view of this stuff and looking to presecute.

nelly_2

rach! wrote:

i was talking to someone today at school who suggested we might think about self certyfying mortgages,

What year are you in at school?

Cara79

Self Cert mortgages can also be used for people who earn differing amounts of commission every month etc.

I agree it is not a facility to use to "increase" your income.

Also, if you take a self-cert mortgage, the lender still has the right to carry out certain checks, i.e. check that you do work where you say you work.

Cara79

Plus I think self-cert mortgages tend to have a slightly higher interest rate!?!

Generali

Cara79 wrote:

Plus I think self-cert mortgages tend to have a slightly higher interest rate!?!

From what I've seen, that's because the lenders assume that the people borrowing are more likely to lie to them and so put a higher rate of interest on them to reflect the greater risk.

Jim_B_3

rach! wrote:

apparently no one will be buying by the end of the year

If only. That'd be some kind of dream scenario!