Self-certification mortgages are offered on the basis
of the customer stating what their likely income will be
rather than by providing documentary evidence. This is not
just an open invitation for borrowers to overstate their
income - lenders are well aware of the levels of income
that can be attained in most occupations. They also have
the opportunity to run additional checks where something
looks unusual, using bank statements, references from existing
lenders and credit information databases to build up picture
of an applicant's financial conduct. If you are a part time
dinner lady claiming an income of £150,000, this will not
go unnoticed.
To help your case when applying for this type of mortgage,
it can be a good idea to present a CV with full details
of your employment history. Keeping and presenting bank
accounts from a longer than required period of time can
also be a good idea, especially if you can demonstrate your
track record for things like credit card payments and remaining
within an agreed overdraft limit.
Allowing borrowers to self-certify can be risky for lenders
and requires the use sound underwriting practices on their
behalf. But as well as raising the interest rate to compensate
for the risk, many self-cert lenders also:
