self-cert mortgages uk street

What Happened to Self-Cert Mortgages?

Every week we get enquiries here at Active Brokers from self-employed people desperately searching for self-cert mortgages, we always help them in the best way we can: explain why so called ‘liar loans’ are no longer an option, and advise them what they need to do to get the mortgage they are hunting for.

What were self-cert mortgages?

A self-cert mortgage was a mortgage that you could be accepted on without any proof of income, you could just state that you earn so much and thus you can afford a mortgage – the lenders would believe you. In some cases you could even be encouraged to exaggerate earnings to some extent, this would have allowed you to meet affordability criteria for a larger mortgage.

They were mainly aimed at the self-employed and specialist workers who can afford a mortgage but might struggle to meet other lender criteria or prove their income is steady and reliable. Even though you might be paying more in rent, lenders could still say you didn’t earn enough to afford a mortgage.

However, before the market crash, lenders and brokers were helping many people find self-cert mortgages when they really didn’t need one, but by going the self-cert route they could be seen to afford a much larger property. This is one of the reasons for their ban in 2014.

What happened to the mortgage market?

houses in uk self-cert mortgages

Since 2014 self-certified mortgages have been banned by the FCA.

Self-cert mortgages were banned by the FCA in 2014 after the mortgage market review. The mortgage market review was conducted to make sure that consumers could afford a mortgage that was suitable to your specific needs and circumstances, it also banned self-cert mortgages, as they were partially blamed for the financial crisis in 2008 and were viewed as a risk for the consumer and not suitable for the general market.

What are my options now?

Self-employed mortgages are your best bet now, there are specialist mortgage brokers and lenders available to help you get the mortgage you need without going down the self-certification route. You’ll definitely need mortgage advice if you are a self-employed individual, there are more hoops to jump through despite the fact you have access to exactly the same range of mortgage products as everyone else. If you have any further questions or want to check what your specific circumstances mean in terms of being accepted for a mortgage, don’t hesitate to chat with us online, give us a call or drop us an email. With Active Brokers there’s no hassle when you get the best deal possible for yourself.

You may have heard about the new overseas self-cert mortgage service that someone has set up – don’t get your hopes up, not only is this extremely risky but they’re also only able to finance around 300 mortgages, and they’re massively over subscribed for the foreseeable future. The FCA has already issued a warning to consumers stating that you will have “no UK regulatory protection” when you take a mortgage from outside the UK.

We think it’s best to avoid going down that route.

What can Active Brokers do?

We can help you find a mortgage. No matter your circumstance, we will always try our hardest to help you: and we don’t charge you a penny if we can’t help you get your mortgage, so what do you have to lose?

We have lenders that require as little as one years proof of trading if you are self-employed. Our mortgage advisers are fully qualified and able to help you no matter what you’re looking for, from First Time Buyer to Remortgaging to specialist services such as Islamic Mortgages. Gary Das, Director and Founder of Active Brokers has been self-employed for many years, he can personally guide you through the application with first-hand experience.

Find out more.


Leave a Comment:

mark Brown says March 27, 2017

Self Employed with net income showing 20K 15K 10K over the last 3 years
Wife employed on salary £26400 plus £5k yearly bonus. Looking to purchase a house for £340k and have 20% deposit – I am a London black cab driver. Can you help?

    Gary Das says March 27, 2017

    Hi Mark, I am assuming 20k is the most recent year? Most mortgage lenders will want to average your last 2 years so using a mortgage lender who will consider the latest year only is going to be important to you. With a 20% deposit the maximum income multiple is going to be 5x which based on your combined income of 20k and 26400 = £232,000. If the bonus has been received for 2+ year then it maybe considered which will be £257,000 maximum.
    Based on your figures of 80% you need £272,000. I hope this helps, please feel free to submit an enquiry via the site to discuss further
    • Please only use these as a rough guide.
    • It is the Lenders responsibility to assess whether the mortgage is affordable to you.
    • This does not constitute advice, it is for information purposes only.
    • Please ask us for a personalised illustration.

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