Non status mortgage solutions for self-employed borrowers

Mortgage lenders have traditionally been shy about lending to the self employed, contract workers and those working freelance. In the past the concern most lenders had if you were self-employed is that you wouldn't have a regular, stable income and therefore wouldn't be regular in your repayments to them. In order to reassure them, you would have needed to produce some other proof of your income. This is usually in the form of validation from a Certified or Chartered Accountant who will need to provide the accounts from your last three years' income.

Anyone not able to produce that information would be unlikely to meet the borrowing criteria of the usual high street lenders, which tend to use set methods of credit scoring to validate an application.

However, employment patterns are no longer as straightforward as they were even in the recent past. There are more self-employed people, many of whom will not have been working for three years, and more people working on short-term contracts and in recent years, a growing number of lenders, including some high street names, have started offering specialist home loans aimed at the self employed market. They tend to underwrite each loan individually, which means they can be more flexible in their approach.

Self Certification

Some lenders also offer the opportunity for self-employed customers to self certify their own income on the application form. With a self cert mortgage (also known as non status), the borrower states their income without having to provide any proof. This is particularly useful where profits have been understated in accordance with Generally Accepted Accounting Practice, for borrowers who have several income streams, such as from property rented out as well as regular employment which they want to use for the mortgage. With these loans, however, you will usually need to be able to put down a deposit of around 10% on the property.

If you own a business that is seasonal or prone to income fluctuations, you may find a flexible self certification mortgage will suit you better than a more regimented loan. With flexible mortgages you can make over or under payments so that you can pay more than required when business is good and during slower periods, underpay or take a payment holiday. 

Self certified rates are now comparable to – and in some cases better than – those you’d find on the high street. You can get a fixed rate, a discount, a tracker and so on, just as with a conventional lender.

Get the best deals

A specialist mortgage broker with access to the entire range of non status mortgage lenders in the UK, will locate the best deal for you. Simply complete our no obligation enquiry form.