What is a Self Certified Mortgage?
Posted on 08. Mar, 2009 by admin in General
A self cert mortgage, or a self certified mortgage was developed in principal as a way for those individuals who are self-employed to be able to purchase their own home. One must be able to prove how much income they make in order to obtain any type of mortgage, and very often, self-employed individuals have a difficult time in proving their income.
The self-employed individual is often seen as the ‘the heart’ of the working population, but when it comes to the matter of owning a home, it is harder for this individual to prove exactly where all of their incoming assets originate. Those individuals who work for an employer have a much easier time in obtaining mortgages. The self employed mortgage permits the self-employed individual to get a loan to buy a home by eliminating the standard ‘proof of income’ requirements that most normal mortgage lenders asks.
A self certified mortgage lets the borrower state their income on the initial application and there is no requirement for providing proof as with a traditional mortgage. The lender may ask for references and they will conduct a credit check and a credit score on the borrower.
Many freelancers or people who run businesses from their homes utilize this type of mortgage and it is growing in popularity due to the rise in self-employment.