Are Self-Cert Mortgages Still Available

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What are self-cert mortgages?

Self-cert, also known as self certified mortgages and self certification mortgages, were used in the UK prior to 2009, as a way to lend money to borrowers who were unable to prove their income. 

Those in Self-Employed roles could declare their earnings without providing any proof of income, in order to obtain a mortgage offer, but this meant that interest rates were substantially higher, to mitigate some of the risk.

Why aren’t they available?

This type of mortgage was not regulated by the Financial Conduct Authority, which meant that it was unfortunately vulnerable to unethical lending practices, which caused many people to borrow considerably more than they could afford to repay.

In 2009 the Financial Conduct Authority banned self-cert mortgages and introduced the ‘Responsible Lending Guidelines’, which all required all Mortgage Lenders to secure adequate proof of income from all applicants.

Getting a self-cert mortgage overseas 

There are countries overseas that still offer self-cert mortgages and some of the UK firms offering self certification mortgages have relocated abroad, to try and circumvent the regulations. 

Whilst it would be possible to approach this type of lender, the Financial Conduct Authority strongly advises against it, due to significant financial risk posed to borrowers from the lack of regulation.

Why is it not advisable to obtain a self-cert mortgage?

As Mortgage Lenders outside of the UK are not governed by UK law, there is no protection for borrowers who use an overseas self-cert mortgage provider. This means that you would be vulnerable to mis-sold products and poor financial advice, were you to take advantage of this practice. 

Self-cert mortgages are known colloquially and within the mortgage industry as liar loans, which probably tells you everything you need to know to avoid using them.

What are the alternatives?

If you are Self-Employed and are concerned that you won’t find UK lenders who will offer you a mortgage, the good news is, your concerns are unfounded. In recent years many Mortgage Lenders have become more flexible to the needs of Self-Employed borrowers, with some choosing to specialise in mortgage products for the Self-Employed. 

If you are a Sole Trader, Partnership, Contractor or Limited Company Director, there are a range of acceptable forms of income lenders will be willing to look at, including:

  • Salary and dividends
  • Salary and share of net profit
  • Investment income
  • Rental income
  • Pension income

Specialist lenders are often able to help a wide range of Self-Employed applicants in very niche circumstances, for example, only having one year of accounts available, to secure a mortgage.

Speak to Blue Pepper Mortgages

At Blue Pepper Mortgages, our Mortgage Brokers specialise in finding Self-Employed mortgages to suit your circumstances. With our access to specialist lenders, we can find options that won’t be available on the high street, allowing you to borrow money for a traditional mortgage, without the risk of a self-cert.


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