Self Certification Adverse Mortgage | Is It Your Best Option?

The Ins And Outs Of A Self Certification Adverse Mortgage

Many people who need an adverse credit mortgage may find that a self certification adverse mortgage is the right product for them. Like other self certification mortgages, a self certification adverse mortgage is designed for people who are unable to prove their income. In many cases, this applies to self employed people. If you drive a taxi, for example, you might not be able to prove what you earn in a given month or year, so if you also have adverse credit, a self certification adverse mortgage might be the product for you. It has been estimated that as much as 14 per cent of the British population is self employed.

However, a self certification adverse mortgage is not just for the self employed. There are other people who can benefit from a self certification adverse mortgage if they have credit problems. These include people who have seasonal employment, people who are on short term contracts and people who make most of their money through commission, such as salespeople. And people who earn bonuses and dividends might also be candidates for a self certification adverse mortgage.

While a self certification adverse mortgage works on the principle that you will not be required to prove your income, but rather to state what you are likely to earn, some self certification adverse mortgage lenders may ask for an accountant to back up your statement. And if you have several years' worth of accounts, you may not need a self certification adverse mortgage at all, but rather a standard adverse credit mortgage.

As a non standard mortgage, the self certification adverse mortgage is offered generally by specialist lenders, of whom there are about 30*. While many high street lenders offer self certification mortgage products, few of them offer a self certification adverse mortgage directly.

Self Cert Adverse Mortgage Deposit

If you get a self cert adverse mortgage you will usually be asked to provide a higher deposit than you would for a standard mortgage. It is not unusual for lenders to expect 75 per cent loan to value, which means you need a deposit of 25 per cent of the property value. However, there are some self certification adverse mortgage lenders who will accept a higher loan to value ratio.

A self certification adverse mortgage is seen as a high risk product. One reason for this is that many businesses fail in the first couple of years, so if you are newly self employed, lenders will think it is highly likely that they won't get their money back. The interest rate charged on the self certification adverse mortgage will reflect their perception. However, if you are able to make the payments promptly and in full for three years, you should be able to switch to a more competitive product at the end of that period.

There are hundreds of self cert adverse mortgage deals and it can be difficult to decide on the best one for you. To help with that decision, it might be wise to check with an adverse credit mortgage broker. As a specialist in this area, the broker will be able to wade through the self certification adverse mortgage deals available to find the one that is best for you.

*Source: Trigold - 31/07/07

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