Self-certification mortgages came to light in an effort to help those who cannot obtain mainstream mortgage because they are self-employed, entrepreneurs, businessmen, freelancers and contract workers whose income are not easily verifiable. Mortgage applications require specific documents and audited records which are usually difficult to secure than others.
In other words, even if you’re earning a substantial income but cannot provide those documents, you far from getting an approval in the usual way; hence, using a mortgage that doesn’t require a proof of income is well best suited in your situation.
Self certified mortgage won’t ask you to produce documents normal mortgage does. There are no payslips or proof of income needed. All you need to do is to certify that you are able to pay your dues in time, and that you have an income to support this. Self-certified mortgages may grant you up to 75% of the purchase price.
This type of mortgage is timely and appropriate as more and more people are going into outsourcing and contract working. Compared many years ago, interest rates have become far more competitive to answer the growing needs of this sector. Alternatively, and with ample documentation, you can always avail of a conventional mortgage to lower interest rates but be prepared to undergo with the usual scrutiny and requirements underwriters do.
You might be tempted to inflate your income because you’re thinking that lenders won’t check it prior to approval. That is fraud and as a criminal offense, which could send you to jail if proven guilty. Is there a reason to lie? The answer is no. Just be truthful how much you are earning, and your sources of income. Don’t forget to include other jobs, income, bonuses or overtime.