Self-Cert mortgages - who does the best rate?
30 September 2003, 11:13 AM
#62
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MarkO tell me about it. The nightmare woman I spoke to last night kept going on about the majority of self certs arnt true self certs and somewhere along the line you have to tell them your income and it has to fit in with their multiplier rates for them to agree to it, so nothing different to a normal mortgage then!
Apparently the true self certs are out there but then thats where you pay the higher interest rates etc.
It turns out that the multipliers go up by going through an intermediary, when I go to Abbey directly they wont do me anything better than times 3. The FA said she could get me times 4.25-4.5 depending on whether I am a class A applicant through a normal mortgage with Abbey and with my figures would mean I didn't need to go self cert.
Total nightmare trying to get the right product!
FB thanks for the email, just replying now
Apparently the true self certs are out there but then thats where you pay the higher interest rates etc.
It turns out that the multipliers go up by going through an intermediary, when I go to Abbey directly they wont do me anything better than times 3. The FA said she could get me times 4.25-4.5 depending on whether I am a class A applicant through a normal mortgage with Abbey and with my figures would mean I didn't need to go self cert.
Total nightmare trying to get the right product!
FB thanks for the email, just replying now
30 September 2003, 11:28 AM
#63
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B2Z, I think you're misunderstanding the concept of self-cert. It sound to me like you're just expecting a lend totally based on LTV percentage, regardeless of whatever earnings you might have. In reality, self-cert mortgages aren't like that - they're not just an 85% LTV, regardless of earnings, they still rely on you having a particular income.
So if you want to borrow 175k, they're still usually based on 3.5x earnings, so you'd still need an income of 50k to borrow that much. The difference with self-cert is that whilst you still need to give them your income, you don't need to prove it. You are simply certifying that you actually do have that income. So the lenders who are quoting 3.5-4x your earnings as the max LTV are true self-cert lenders.
Therefore, any self-cert lender will ask you for your income, and may even want some reassurance that such an income is vaguely realistic. They shouldn't, however, require accounts, bank statements, payslips, etc.
Of course you could lie, but that's your decision. The self-cert part is that you're certifying that you have that income, and they take your word for it. If you lie and subsequently fail to service the loan, expect them to be far less understanding when they finally figure this out....
[Edited by MarkO - 9/30/2003 11:31:46 AM]
So if you want to borrow 175k, they're still usually based on 3.5x earnings, so you'd still need an income of 50k to borrow that much. The difference with self-cert is that whilst you still need to give them your income, you don't need to prove it. You are simply certifying that you actually do have that income. So the lenders who are quoting 3.5-4x your earnings as the max LTV are true self-cert lenders.
Therefore, any self-cert lender will ask you for your income, and may even want some reassurance that such an income is vaguely realistic. They shouldn't, however, require accounts, bank statements, payslips, etc.
Of course you could lie, but that's your decision. The self-cert part is that you're certifying that you have that income, and they take your word for it. If you lie and subsequently fail to service the loan, expect them to be far less understanding when they finally figure this out....
[Edited by MarkO - 9/30/2003 11:31:46 AM]
30 September 2003, 11:37 AM
#64
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OK yep thats what I am getting at, there are products out there that require no declaration of earnings what so ever, allegedly.
The ones which require you to say what you earn arnt really true self certs as far as i am concerned, its still based on your earnings and a multiplyer, like you say you just don't need to give them payslips. This is what the woman was going on about last night saying a lot of people lie and its very dangerous because its fraud and if caught you are in the deep end.
Its the true self certs that I wanted to look at as I know what I can afford and dont need it based on some ridiculous multiplyer of say 3 times which is what the Abbey told me theirs was.
House prices have far outstripped salaries but interest rates have dropped to the floor so that means the multiplyers are totally out of touch with todays economy and peoples financial situations. This is why to me the true self certification mortgages are the sensible way to borrow if you can say thats my limit and I am not going to go over the top.
The ones which require you to say what you earn arnt really true self certs as far as i am concerned, its still based on your earnings and a multiplyer, like you say you just don't need to give them payslips. This is what the woman was going on about last night saying a lot of people lie and its very dangerous because its fraud and if caught you are in the deep end.
Its the true self certs that I wanted to look at as I know what I can afford and dont need it based on some ridiculous multiplyer of say 3 times which is what the Abbey told me theirs was.
House prices have far outstripped salaries but interest rates have dropped to the floor so that means the multiplyers are totally out of touch with todays economy and peoples financial situations. This is why to me the true self certification mortgages are the sensible way to borrow if you can say thats my limit and I am not going to go over the top.
30 September 2003, 11:47 AM
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The ones which require you to say what you earn arnt really true self certs as far as i am concerned, its still based on your earnings and a multiplyer
You're still not getting it.A self-certification mortgage is simply one where you certify the earnings that you state, upon which the loan amount is based, usually with an earnings multiplier to calculate the maximum lend. That is a true self-cert mortgage. The reason they're 85% LTV is because obviously there's a risk that you might lie, so the lender has to cover themselves.
It sounds to me like what you're looking for is a mortgage where they'll lend many multiples (5x or more) of your earnings (regardless of whether you prove them with payslips, or certify them yourself). That is a very risky business to be getting into - some would say that borrowing 3.5x your earnings is risky enough!! If lenders are lending high multiples, that's what will push the rates up - regardless of whether your income is certified by yourself or the underwriters.
I would think very carefully before going down this route - if rates go up (which they will) then in the long term (even if you fix your rate for a couple of years) you could find yourself in all sorts of problems. Plus you'll find it harder to get critical illness cover and life insurance for sums which are many multiples of your earnings.
As I've said before in a thread a while back, self-cert mortgages are useful for contractors, or people with irregular incomes (like me). Anyone who uses them as a deceitful way to get a massive mortgage (relative to their earnings) is very foolish indeed.
30 September 2003, 12:15 PM
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Well thats how it had been explained to me, and this is also how the financial advisor last night explained it, ie their are ones who want declaration of income and use a multiplyer and there are ones who don't. IE the ones who dont are a true self cert as you are guaranteeing you can afford the mortgage, not leaving it down to them to decide your financial position. I am not stupid enough to go and apply for something I can not afford, and anyone who was stupid enough would simply lose their house so its not that risky to the lenders.
30 September 2003, 01:07 PM
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Mark - A true self cert is were you sign a form declaring that you can afford to meet the repayments. They do not even ask for income, and base the loan entirely on LTV.
The kind of self cert you are looking at is just really a way to get around income multipliers, but there is no real benefit to these unless you are self employed, doing lots of cash jobs and not declare them to the taxman, or if you are happy to lie on the application
[Edited by fast bloke - 9/30/2003 1:08:02 PM]
The kind of self cert you are looking at is just really a way to get around income multipliers, but there is no real benefit to these unless you are self employed, doing lots of cash jobs and not declare them to the taxman, or if you are happy to lie on the application
[Edited by fast bloke - 9/30/2003 1:08:02 PM]
30 September 2003, 01:21 PM
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p.s. - Mark - We recommend that you have 20 times salary for Life and CIC if you want to be properly protected. No many people go for it, but this is what the FSA wants us to sell, on the basis that you can replace your income and protect your capital by investing your payout at 4%.
30 September 2003, 05:09 PM
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Fair enough - guess I've been mislead then. S'pose that explains why there's so few 'true' self-cert mortgages out there (I've not come across any at all so far).
Having said that, I would imagine that in most cases where the LTV is 75-85%, the property value would have to be approximately 3.5x their income anyway for them to afford the repayments on a normal mortgage - just because that seems to be pretty much how the figures drop out when you calculate them. So I suppose it all works out in the end in most cases anyway.
Having said that, I would imagine that in most cases where the LTV is 75-85%, the property value would have to be approximately 3.5x their income anyway for them to afford the repayments on a normal mortgage - just because that seems to be pretty much how the figures drop out when you calculate them. So I suppose it all works out in the end in most cases anyway.
30 September 2003, 06:29 PM
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can someone pls explain exactly what questions are asked etc, the procces of applying for a self cert etc, would i have to find a property first ? pay any cash first?
never had a mortgage and would like to be half clued up before i phone my bank (halifax) and ask for the possibility of having one
or recomend a company who offeres a good easy self cert?
Ta
Lee
never had a mortgage and would like to be half clued up before i phone my bank (halifax) and ask for the possibility of having one
or recomend a company who offeres a good easy self cert?
Ta
Lee
30 September 2003, 06:41 PM
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It's the same as a normal mortgage application. You usually have to have a property in mind (or at least a property value and an amount of cash that you will be contributing). With Bank of Scotland, certainly, it's a normal mortgage application for a house purchase, just without having to fill in all the earnings malarky, and without having to enclose accounts, bank statements, etc., etc.
30 September 2003, 07:38 PM
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Name, address, telephone, DOB, NI number.... 
They'll also ask what you do for a living, and may ask what c/card bills, loans or other debts you have. They'll ask the value of the property, the amount of deposit you have, the purchase price, plus the conveyancing fees, etc.
That's mostly it...
They'll also ask what you do for a living, and may ask what c/card bills, loans or other debts you have. They'll ask the value of the property, the amount of deposit you have, the purchase price, plus the conveyancing fees, etc.
That's mostly it...
30 September 2003, 07:47 PM
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4.95% fixed to 1/1/06, no redemption overhang @ 85% LTV.
1% discount (current 4.49%) to 1/1/06, no redemption overhang @85% LTV.
These deals and others without stating an income on the form. The LTV is reduced to 75% for first time buyers.
You must have very good credit history.
These are not bad rates considering you do not declare an income as there are not many 2-3 year fixed rates below 4.5% for full status cases at the moment.
What you must all remember is that what is good for one is not always good for another as all our circumstances are different.
It is possible to get very competitive rates on a self cert basis but as has been said before these are based on income multiples and the income declared on the form.
1% discount (current 4.49%) to 1/1/06, no redemption overhang @85% LTV.
These deals and others without stating an income on the form. The LTV is reduced to 75% for first time buyers.
You must have very good credit history.
These are not bad rates considering you do not declare an income as there are not many 2-3 year fixed rates below 4.5% for full status cases at the moment.
What you must all remember is that what is good for one is not always good for another as all our circumstances are different.
It is possible to get very competitive rates on a self cert basis but as has been said before these are based on income multiples and the income declared on the form.
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