Self Employed Self Certified Mortgages
Self-certified mortgages were once one of the most popular ways for self-employed people to apply for a mortgage. They were aimed at freelancer or contract workers who were not able to prove their regular income as easily as a salaried member of permanent staff.
However, they they were effectively banned by the Financial Conduct Authority (FCA) back in 2009 in the wake of the credit crunch. The authority ruled that anyone borrowing money must be able to adequately prove that they could repay the amount in advance of any lending.
The end of self-certification mortgages led to widespread worry from self-employed people that they would no longer be able to secure mortgages or even renegotiate their existing lending terms.
There are other options in place, however, allowing contract-based workers to be able to obtain lending, even from high street mortgage providers. Many providers are now willing to lend to freelance workers who have contracts in place with clients and have had a contract for just six months.
This approach gives freelancers a lot more flexibility when assessing their mortgage options. It is a sensible move from lenders to be more accommodating to freelance workers, especially when many made the move from permanent positions to freelance contracting due to the increased rates of pay they were able to command, and yet were finding it more difficult to secure finance.
At Easy Accountancy we work closely with our recommended mortgage company Contractor Mortgages Made Easy (CMME), which specialises in sourcing mortgages for freelance workers and helping them to secure the best rates with a variety of high street lenders.
Mortgage experts at CMME backed the decision of the FSA to tighten the rules on lending in relation to self-certification mortgages, as there was evidence of widespread abuse of the self-certified mortgage model, which led to high levels of arrears when people had used inflated claims of income to secure lending.
But if you are a successful freelance worker with a regular income then there is no need to choose self-certification anymore as there are plenty of mortgage providers who understand the unique circumstances of self-employed workers and will accept reasonable proof of income to assess your mortgage application.
If you are self-employed and want to know more about the mortgage options available to you then call CMME on 01489 555080, email firstname.lastname@example.org or send in your details through the below form and a member of the team will be back in touch.
Contractor Mortgages Made Easy is a trading name of Mortgages Made Easy Limited. Authorised and regulated by the Financial Conduct Authority (FCA reg. 414798).Registered in England No. 4886692 Registered Office: 9 London Road, Southampton SO15 2AE.Your home may be repossessed if you do not keep up repayments on your mortgage.