Self Cert Mortgages
Self certification mortgages are loans that do not require the borrower to verify their income. These types of loans allow people who are self employed to gain access to mortgages. Most conventional loans make it very hard for people that are self employed to obtain a mortgage. A self cert mortgage alleviates the need for all the work documents and encourages everyone, including the self employed, to strive for home ownership.
Self certification mortgages are a beneficial tool for people who work in a seasonal industry, such as farm work, or who work strictly off of commission. These types of loans allow the borrowers to “guarantee” the lender what they make over the course of a year, even if they do not have weekly pay stubs. Borrowers will be required to provide financial statements, such as bank records, which show different deposit amounts that coincide with your earnings.
There are a few drawbacks to this type of mortgage. Borrowers will be required to make a very large down payment on the home. Some lenders require as much as 80% down on the purchase price of the home. Borrowers will also pay a higher interest rate than they would with a more conventional loan.
People that are interested in this type of loan should inquire with their selected lender all the qualifications they need to qualify.
People that have the ability to make a very large down payment on a home may find this a beneficial tool. The large down payment on the property will guarantee your monthly obligation will be very low, even with higher interest rates. The investment into the property will provide the buyer with instant equity in their home allowing for easier financing in the future.
While it is a little harder to find a lender that is willing to make this type of loan, these loans are still on the market. Mortgage interest rates are currently low and it is considered a buyers market. A borrower, using this type of loan structure will find they can purchase a very nice home at a very low monthly cost, even if they are self employed.