Self Certified Mortgages Explained

In this article, we’ll confirm whether it’s still possible to get a self-certified mortgage, discuss the alternatives, and explain where to find the expert support you’ll need for complex or hard-to-prove income.

Are self-cert mortgages still available?

No, it’s no longer possible to self-certify for a mortgage in the UK. When they were available, lenders would use higher rates to offset the risk, but this wasn’t enough. As a result, the Financial Conduct Authority (FCA) banned self-certified mortgages in 2009, during the wake of the financial crisis, when introducing responsible lending guidelines.

How did they work?

This type of mortgage became popular for a period of time as it allowed applicants to apply for a loan without providing proof of regular income.

Self-certification or ‘self-cert’ mortgages were most sought-after by people who were:

• Self-employed
• Contractors and freelancers
• Company directors
• Applicants with complicated or ‘non-standard income’

Instead of showing lenders documents proving income, applicants could self-certify themselves to obtain a mortgage. In practice, this made it much easier for people to qualify for a loan. However, it also meant an added risk that applicants would inflate or even make up their income for a self-certified mortgage.

Will they ever come back?

It isn’t very likely. Self-cert mortgages are risky for both the borrower and the lender, which means they’re an unstable situation for the whole mortgage market. If you’re struggling to find the right proof of income, it may be worthwhile seeking the help of an experienced mortgage broker for advice on what solutions could be available.

Alternatives to self-cert mortgages

Although self-assessment mortgages have been retired from the market, you may still need a more flexible lender or product type because perhaps you are:

• Self-employed with one year’s accounts, have bad credit, use a government scheme, or only have a small deposit.
• A limited company director with declared losses in the last three years or declining profits.
• Generating income from a variety of areas or lacking complete paperwork.

Your situation will be unique, and the best way to find the right solution is to seek the assistance of a skilled advisor.

They’ll be able to look at your circumstances and needs and then consider alternatives to self-cert mortgages worth exploring, such as:

• Using an asset-based mortgage – these are exclusively for high-net-worth individuals
• Showing evidence of a viable investment vehicle for a buy-to-let (BTL) mortgage.
• Looking into commercial mortgages if it’s appropriate because lenders aren’t regulated and can be more flexible.
• Remortgaging from an original self-cert mortgage to a new, more suitable product.
• A guarantor mortgage if you have a close family member who would be prepared to support your application

How a broker can help get a mortgage with limited proof of income

If you’re struggling to meet the proof of income requirements set out by some lenders, using an expert broker can be your best route to securing a competitive mortgage. An experienced broker can look at your finances and income history and then approach your mortgage needs holistically.

This means they’ll find the best mortgage for your individual circumstances without the need for self-certification. Along with exploring all the potential possibilities, a specialist broker can also help manage your application from start to finish, even assisting with evaluating your credit reports.

If you’d like to be introduced to a skilled broker, enquire. The brokers we work with are experts in securing mortgages for clients with complex income situations.

Evidence of income lenders now accept.

This part of the application can be flexible as long as you deal with the right lenders.

But in most cases, these are the sorts of proof of earnings you’ll need to provide instead of self-certification:

• Payslips from your employer.
• 1-3 years of certified accounts.
• SA302 year-end tax return.
• Existing, past or upcoming contracts.
• Profit projections (if you have less than 3 years of accounts).
• Details of any dividend payments.

Ideally, gather as much evidence as possible relating to how you make money. When you present everything you have to your broker, they’ll be able to take a look at it all and then find you a top deal with the most suitable lender based on the income evidence you’re able to provide

Can you get a self-certified mortgage outside the UK?

Yes, some countries have not banned self-cert mortgages or put in place proper regulations to prevent self-certification. However, the FCA strongly advises against pursuing these types of overseas mortgages because the lack of controls also means there’s no protection against bad mortgage advice, extortionate rates, and product mis-selling.

Speak with a broker about alternatives to self-cert mortgages

Although self-cert mortgages are a thing of the past, an experienced broker can still help you arrange a competitive loan no matter how complex your income situation is.

The brokers we work with have plenty of first-hand experience setting up mortgages for self-employed clients or drawing income from various sources. So you don’t have to feel like you’ve missed out on a risky self-certified mortgage.

Just call 0330 818 7026 or enquire. Today, we’ll set up a free, no-obligation chat between you and your ideal mortgage broker.