This type of mortgage is also known as a non-status mortgage. Not only for the self-employed, it can also apply to anyone who can guarantee a large regular bonus or anyone whose annual income is more difficult to assess such as a freelance worker, commission-based workers or anyone with seasonal earnings.

Self-certification is when a borrower declares their income on a signed declaration and the lender accepts it and bases your mortgage on this amount. There is no need for supplying accounts or bank statements or any other proof. The lender will rely on references from banks and any other lenders. They may apply a ‘sense check’. This is when they look at your business and your declared income, so that if there looks to be a discrepancy, they will perform more checks.

Your mortgage will be based on your level of affordability, so if you choose to lie about your income, you may have problems keeping up the repayments. Lenders will undertake more rigorous credit checking to try to ensure that this does not happen.

This type of mortgage can be found in almost every standard format, such as fixed, discount, variable, flexible, cashback, 100% or buy to let. It is standard to ask for something in the region of a 15% deposit. Interest rates, although competitive, can be slightly higher than with a more traditional mortgage, due to the extra risk involved.

Other areas to look into: Self Certification Remortgage, Self Build Mortgage, UK Certification