Mortgage Self Certification
Mortgage Self Certification
What is Mortgage Self Certification?
Mortgage Self Certification is where an individual who is self-employed is able to confirm their own earnings without a p60 or recent wage slips, or a reference from an employer.
The traditional approach to proving earnings just doesn’t work for the self-employed, and with some lenders Mortgage Self Certification didn’t require proof at all. However, in most cases the applicant will have had to provide recent accounts or a reference from their accountant.
Which Lenders Accept Mortgage Self Certification
Over 20 lenders have withdrawn from the mortgage self certification market in the past year, with the last two of significance, Nationwide’s specialist arm, The Mortgage Works, and Platform, a division of rival society Britannia, also pulling out of this market in the last two months.
Despite the Financial Services Authority recently issuing a discussion paper that proposed banning self-cert home loans, the self-employed should still be able to obtain mortgages if they have been trading for a few years and able to provide accounts or a reference from an accountant. However, obtaining these loans will now be more difficult, and obtaining loands with no evidence at all to accompany Mortgage Self Certification could be a thing of the past.
The Future of Mortgage Self Certification
Although the clampdown on Mortgage Self Certification does make things more difficult for the Self Employed, other products are likely to be developed to meet this group’s needs.
David Tweedy, Platform’s managing director, said he said he understood the regulator’s concerns on income verification, but added: “We continue to believe the industry must recognise that self-employed people can have different circumstances and may not always be able to provide the normal proof of income documentation required. As a lender which prides itself on financial inclusion, Platform remains committed to supporting self-employed people, and will now work with the sector with a view to developing a new product that meets the FSA’s guidelines.”
