The broker said an increasing number of workers are being obliged to consider self-certification mortgages as they trade the 9 to 5 job for self-employment and short-term contracts.
Paul Hearnden, managing director of My Mortgage Direct , said: “Over the past year we have seen a steady rise in enquiries from people who, whilst earning enough to pay their mortgage, are dismissed by mainstream lenders because they can’t prove their income with pay slips.
“But this doesn’t mean they can’t get a mortgage. A self-certification mortgage option is the straightforward way round this stumbling block and makes the buying of property easier for a section of the market that has long been sidelined.”
Self-certification mortgages are available for borrowers who can’t verify their income because it may come from a number of sources, or they may not have been trading for long enough to have the required number of year’s accounts. The mortgage is offered on the basis of what your income actually is and doesn’t need documentary evidence.
Increasing numbers of workers are being offered short-term contracts as employers look to reduce their responsibility to their workforce in terms of benefits and pensions. But this should not – and does not - mean they can’t enjoy the financial security of those on permanent contracts.
“More and more mainstream lenders are updating their view of what makes a customer a safe bet,” said Hearnden. “But in the meantime, not fitting the standard employee mould should not mean someone is considered a bad risk. With changing employment patterns, a self-certificate mortgage can be the solution for many people. Of course, some borrowers who think they are self-cert material may find they fit mainstream criteria after all as lenders become more flexible and move towards affordability-based lending, so it’s advisable to use a broker to find the best deal.”
