| Mortgage lenders may seem hell-bent on | | | | went pear-shaped. |
| sharing their money with those borrowers in | | | | |
| steady employment, but what happens if you | | | | Self-certification mortgages do tend to be |
| are newly self-employed and can offer little | | | | lumped in with lending to the insolvent and |
| evidence that you can be relied upon to keep | | | | uncreditworthy and rates are unlikely to be |
| up your monthly mortgage repayments? The | | | | the best on the market, but needs must when |
| answer, if you have little in the way of | | | | you need a roof over your head. |
| liquid assets, is not very much. | | | | |
| | | | Lenders usually expect the borrower to |
| As long as you can put down a chunky deposit | | | | provide a substantial deposit. You will |
| on the value of the property, you wish to | | | | probably need to contribute at least a fifth, |
| buy, you are still in with a chance of a | | | | more probably a quarter, of the property's |
| mortgage. Of course, you can't provide the | | | | value. |
| lender with copies of payslips or an | | | | |
| employer's reference and, unless you have | | | | Mortgage lenders regard it as too risky to |
| been self-employed for three years or more, | | | | provide more than a 75% or 80% |
| it won't be satisfied by examining your | | | | self-certification mortgage. And if |
| accounts. | | | | "self-certification" suggests that you simply |
| | | | cross your heart and promise to pay, it isn't |
| Even if you have been trading on your own for | | | | quite that simple. Lenders won't take your |
| a long period, you may feel that the net | | | | word that you're good for the repayments. |
| profits shown do not create the sort of | | | | |
| picture that would impress a potential | | | | They will check your credit rating, and may |
| mortgage lender. | | | | go on to demand even more evidence or |
| | | | evidence of earning power than they would |
| The solution is the self-certification | | | | from the established self-employed. |
| mortgage, a personal finance product that | | | | |
| arrived in the early 1990s to cater for those | | | | Usually the main form of proof is a signed |
| borrowers who were able to lay down a | | | | accountant's certificate, but this may need |
| reasonable deposit but would have difficulty | | | | to be supported by bank statements for your |
| proving their earnings. | | | | business account, over whatever period the |
| | | | lender specifies. |
| Some lenders felt that this was an underrated | | | | |
| market and that employees were as likely to | | | | Also, if you already have a mortgage, you may |
| lose their jobs as the self-employed were | | | | be expected to provide your statements to |
| likely to lose their jobs as the | | | | show that you are a reliable customer - if |
| self-employed were likely to fail in | | | | you pay rent, your landlord can be asked to |
| business. | | | | provide your statements to show that you are |
| | | | a reliable customer - if you pay rent, your |
| In fact, they argued, the self-employed were | | | | landlord can be asked to provide a reference |
| better motivated not to fail, and might be | | | | to the same effect. |
| better equipped to pick up the pieces if all | | | | |