UK SELF EMPLOYED MORTGAGE
SELF CERTIFICATION QUOTE

If you work for yourself or are a freelancer or a contract worker or paid solely on a bonus or commission basis then you may have found difficulty in the past in obtaining a secured loan to buy a house. We can help you to get a self employed mortgage using 'self certificaton' at sensible rates of interest that are a substantial saving on unsecured loans and only marginally above the basic rates charged for secured loans to those in full time paid employment.

Rates of interest for a self employed mortgage are determined by the risk perceived by lenders in regards to repayment of loans and the expenditure that they will incur in the event of default. Most lenders are fully secured by the value of the property however in the event of default they will lose the profit margin on the transaction and have the expenditure of removing the occupant and selling the property in order to recover their loan. Most lenders have long experience in these matters and many simply refuse to lend to those who are not in full time, normally paid jobs. Our lenders, who are not always mainstream high street institutions, consider every case on its merits and in that way treat applicants on a personal basis which enables them to discriminate only against those who really do pose a serious risk of default.

The amount that can be borrowed on a self employed mortgage is dependent on a number of factors and on the overall risk attached to both the applicants personal circumstances and on the extent of the loan and on the property itself :-

• the applicants past financial record is considered and whilst a poor credit history is not an absolute bar it can alter the terms under which an offer of finance will be made especially in regards to the interest rate
• most lenders will consider family income and in particular spouses or partners income may be aggregated prior to applying the annual multiplier. The income from other occupiers may also be taken into account
• any other pre-existing liabilities are considered and other debts and monthly payments are taken into account to ensure that the borrowers income is sufficient to discharge the proposed loan instalments
• the property value and deposit are matters of prime importance to the lender in order to ensure that there is sufficient value to discharge the loan in the event of default by the borrower

Whilst those who work for themselves may have insufficient business records to supply proof of income there is a new breed of lenders who will consider a self employed mortgage based on trusting the applicant to accurately state the level of income on a self certification basis. These lenders have exactly the same requirements as the mainstream lenders in that there must be sufficient value in a saleable property which secures their loan before they are prepared to lend however they do take on an extra layer of risk in the self certification process, which is of course open to abuse and is reflected by an increased borrowing rate. This is known as ‘loading’ however the extra rate is by no means excessive and is normally in the region of 1% over the normal basic rate. It must be born in mind that whilst there is some extra risk to the lender, the loan will almost always be fully secured by the value within the property and the ‘loading’ merely reflects the potential for extra costs to the lender in the event of a default in payment of the instalments which may require legal action to be taken.