Five years ago, if you could not prove your income to a lender, you were classified in the same way as persons who were bankrupt! That meant you’d have paid an extortionate interest rate, to cover the additional risk that lenders felt you presented to them.
These days that’s all changed. The modern economic reality is that we all change jobs regularly; furthermore redundancy is such a common occurrence that more people than ever before are starting their own businesses. Lenders are starting to recognise that company directors, entrepreneurs and the self-employed are not just the engines of the modern economy, but therefore also an essential source of mortgage business; and increasingly lenders are offering them more reasonable deals.
The result is the self-certified mortgage (self-certified refers to the fact that proof of the mortgagee’s income comes not from an employee or accountant, but from the mortgagee’s own statement of fact). Here, the lender will still carry out a credit check; but the deal will be better than the sort offered to bad-credit cases, recognising that the mortgagee is not incapable of managing their own finances; but merely unable to present the right figures.
A whole host of specialist companies have sprung up to support this market, including Jim Whites and IGroup; but regular lenders like the Birmingham Midshires and Nationwide are also offering increasingly wide ranges of self-certified mortgage products.
