A self-certified mortgage, also known as a self-cert or self-certification mortgage, was a type of mortgage that enabled individuals to borrow without having to prove their income. These types of mortgages were popular with self-employed business owners who often find it more difficult to prove their income than salaried employees.
What is self- certified mortgage?
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Both employed and self-employed homeowners looking to remortgage will probably already have realised that there are many pitfalls. Most self-employed people do not receive pay slips and are often paid in cash so they can rarely prove accurate current income levels. Additionally, the last full year’s completed tax return does not require filing until almost 9 months after the normal year end so this information for mortgage lenders is usually deemed as out of date.
This situation can make it very difficult for self-employed applicants to get accepted by mortgage lenders. For this reason, many lenders devised mortgages specifically for the self-employed.
These mortgages were known as self certificate mortgages, for which formal proof of income was not required. Unfortunately, these dynamic home loans that were scarcely available in the first place have now completely vanished from the UK market. Due to tighter regulation and the more aggressive income-assessing protocols of major lenders, self certificate mortgages are no longer available for UK borrowers.