Don’t let Unscrupulous Mortgage brokers hoodwink you into believing they can secure you a self-cert mortgage.
We frequently get asked whether we can source self-certified mortgages. If you are one of these customers, self-cert mortgages, as they were better known, were consigned to the scrap heap by the Financial Services Authority (now the Financial Conduct Authority, or FCA) back in 2009.
However, if you type “self-cert mortgages” into Google or Yahoo, you will still find many sites and mortgage brokers promising to secure these types of products. Let’s get things straight, it’s a scam, nothing more, a trick to get you to their website. Don’t be deceived by these dubious mortgage brokers or finance companies.
Back in the old days of the “self-cert mortgage” many self employed people were conned by unscrupulous mortgage brokers claiming that this was the only way they could secure a mortgage. That was never the case. A number of specialist mortgage brokers like us had access to flexible underwriting terms with a handful of high street lenders which used a common sense approach to assessing affordability.
Applying directly to your bank or mutual society
A trip to your local high street bank or mutual society will result in them typically requesting three years’ worth of accounts. Most self employed people who have applied directly to a bank or building society will have experienced this.
Bank branch staff have a tendency to lump company directors, sole traders, freelancers, contractors and business owners into the same boat, even though their risk profile may be very different.
Self employed people have as good a chance as anyone else securing a mortgage
Since the withdrawal of self-cert products from the market, there is a common misconception by business owners that they will struggle to secure a mortgage. These are not to be confused with self employed mortgages, which offer alternative solutions. For many self-employed people, their chances of being able to borrow are still just as good as anyone else’s.
What are the options for self-employed mortgage borrowers?
Theoretically, self-employed people have access to the full range of mortgage products as salaried workers. The key is working with a mortgage specialist that is able to prove you have the income necessary to make the repayments on the loan for which you are applying. Typically, that will require you to have a minimum of one to two years’ accounts – or tax returns – to show to lenders.
We have relationships with lenders who are willing to use pre-taxed profits plus director’s salary which allows you to borrow substantially more. This method of calculation actually reflects the true earnings potential, including retained profits not paid out for tax planning purposes.
We have relationships with lenders that are willing to accept one year’s accounts for those business owners who have less than two years trading history.
Mortgages based on your contract rate alone! No accounts or tax returns required. All we need is a copy of your contract and bank statements, that’s it!
Choosing a specialist mortgage broker is critical if you want to avoid the hassle of dealing with lenders or brokers who probably don’t understand the unique way in which you work. It’s really useful for self-employed workers to take impartial and expert advice on getting the best possible mortgage deal.
We have worked tirelessly over the years to develop strong relationships with lenders that are sympathetic towards the self employed. We will ensure that your application is properly packaged to reflect your true earnings and falls in front of the right decision makers rather than using bank branch staff.
Our specialist mortgage advisors will help you find a mortgage solution to suit your self-employed status. They will help you calculate how much you can potentially borrow based on your accounts, call us on 0208 421 7994 or pop your details onto the quotation form at the bottom of this page.