Self Certification Case Study - How NOT to apply for a Self Cert Mortgage

This is a scenario of many who are applying for self cert mortgages. It may seem like a great way to get credit when you can’t afford a mortgage, but the reality is that you could end up losing everything including your home.

Self cert mortgages are designed for people who cannot prove their income, like an actor or a freelancer, but in recent years and with the credit culture that we have farmed they have slowly become known as ‘liar loans’.

Case in point…

Keith has a credit card, but the limit is just £200 and he has numerous CCJs against his name. Keith is not surprisingly, continuously late with payments for loans and monthly payments that he has to make. Half way into the month Keith is usually most of the way through his wages, so uses his credit card to tide him over until the next pay day.

Despite the problems that are already facing Keith he has opted to go for a self cert mortgage and has applied for a self cert mortgage stating that he earns £100k. Keith went to a lender that he knew would not question his earnings and managed to secure a mortgage for £300k or more.

Self cert mortgages have been heralded as ‘liar loans’ and many mortgage brokers are loathe to touch them. At Click n Go, we pride ourselves on making sure that our clients are well qualified and make sure that they fully understand the ramifications of not being able to repay their mortgages.

You may like to think that ‘Keith’ is a made up scenario, but in recent findings that we have previously talked about in our blog the FSA found the several mortgage brokers were not giving good mortgage advice. We are appalled by this practice and want to make sure that our customers are not only aware of this practice but also understand the mess that it can land them in.

If you want to talk to someone about a self certification mortgage and your options, then get in contact with us today.