The Self-Cert mortgage is dead

Published on 29th October 2009

A mortgage route often mistakenly used by Contractors is just about finished after news that TMW (part of Nationwide) are pulling their Self-Cert products off the market. Never fear though because there was always a better way open to you based on providing proof of contract rate alone.

Self Certs, whereby little or no proof of income was required on a mortgage application were often seen as the only option for contract workers who often lacked the necessary accounts history to veryify income. We have, however, long been championing the use of our contract based mortgages over self certification because the sad truth is that whilst these mortgages were,seemingly an easy option, borrowers paid dear in terms of high mortgage rates and arrangement fees.

It is estimated that a third of all mortgages approved in 2007 were not backed by proof of income and a higher proportion of self cert loans have subsequently fallen into arrears. The financial services regulator the FSA has become increasingly concerned about the potential for fraud and for consumers to overstretch themselves and it therefore comes as no suprise that this week there was speculation that they ban self certs altogether.

So what other options are there?

As an alternative to the Self Cert mortgage we are able to arrange a mortgage based simply on your contract rate alone. Going directly to a lender and asking for a mortgage based on your contract rate would almost certainly end in failure as they will probably look at the amount that you take home each month and assume that you cannot afford the repayments. Any decline would close the door for us to them approach that same institution.

At ContractorFinancials we have built a strong relationship over the past 12 years with the High Street institutions and also with smaller more specialist lenders and this has enabled us to negotiate specialist underwriting terms for Contractors. We are able to secure your mortgage based on your contract rate alone which means you don't have to worry about how much you pay yourself or, for instance, a substantial pension contribution reduces your taxable income.

With schemes available for Freelancers who are even within the very first week of starting your first contract, we have a solution to fit almost all needs and charge none of the usual brokers fees that apply via other less specialist advisers.

Our unique access to lenders allows you to avoid the costly mistakes and heartache of that using a less specialised broker or that going direct to the mortgage company can often entail.

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