Self-certification mortgages may be solution for some investors
Released on = July 16, 2007, 11:27 am
Press Release Author = Jimwatson
Industry = Real Estate
Press Release Summary = Mortgages can be a minefield for even the most experienced operator in the property market. There are so many different varieties of mortgage available - and so many different rates and variable options - that any mortgage hunter can be forgiven for developing a headache at the mere thought of sorting one out.
Press Release Body = Mortgages can be a minefield for even the most experienced operator in the property market. There are so many different varieties of mortgage available - and so many different rates and variable options - that any mortgage hunter can be forgiven for developing a headache at the mere thought of sorting one out.
A particular problem that can affect people who depend wholly or entirely on income derived from self-employment - which includes a significant number of property investors - is proving income.
It is often the case that the investor seeking a mortgage cannot define their whole income with exactitude, because of external factors that may affect it, such as market forces.
For example, one or more properties in the portfolio might be empty for some or all of the financial year. An area might experience economic collapse through the closure of key local employers, perhaps forcing the landlord to reduce rents.
At the same time, an area might experience an upturn in fortunes, allowing for the landlord to charge more rent. That extra income may have allowed for the negotiation of a more favourable mortgage repayment timeline.
These are just some examples of the difficulties somebody with an unconventional income can face. They also serve to illustrate why self-certification mortgages have a unique and useful position in the market place and why such mortgages are a valuable product that certain investors would struggle without.
Self certification is actually not a type of mortgage in itself, but more of a mechanism that allows people who cannot prove their income to have access to mortgage lending facilities.
According to Andrew Strange, policy analyst at the Association of Mortgage Intermediaries, self-certification mortgages are a valuable part of the mortgage market which are capable of \"bridging the confusion\" for many customers with unconventional incomes. He explained that the key issue is determining affordability.
\"Affordability is about deciding what people can afford, and obviously that has to include changes in income and changes in situation as much as you can. Self certification is about evidencing income; and there\'s a variety of reasons why you might not be able to evidence your income fully. It could be that you\'re paid bonuses on commission, you\'re self employed, perhaps you\'re paid in dividends as well as a small salary.\"
A number of major high street names supply self-certification products, such as Bradford & Bingley and the Bank of Ireland. Anyone interested in investigating this avenue of finance might like to start by using one or more of the price comparison sites that can be found on the internet.
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