Self-certification mortgages ("Self cert mortgages"), also generally referred to as non-status mortgages, are most commonly used by the self-employed and have been becoming popular in last few years, as more people have become self-employed individuals. Self cert mortgages are specifically designed for people whose earning capacity is difficult to assess using the normal practices adopted by most conventional mortgage lenders. Self cert mortgages allow you to declare (i.e. self certify) your earning capacity without providing the documentary evidence usually required for a mortgage application.

Together with the self-employed, self cert mortgages may also be applicable to other categories of individuals. These will include: working on short-term or part time contracts; employees who mainly depend on bonuses or commissions for a significant proportion of their income; unsalaried company directors; and low income earners with other income or material assets upon which they rely for future payment.

Irregular work shifts, lack of good accounting records, bonuses, commission and other seasonal pay can cause difficult in guaranteeing the earning capacity necessary to secure a conventional mortgage. With self cert mortgages there is no need to supply employment records, accounts, bank records or any other proof of income. Instead the self cert mortgage lending institution will take up bank and lender references, credit checks, landlord's reference and solicitors' confirmation of previous ownership.

With no or little adverse credit, the interest rate on self cert mortgages is likely to be slightly higher than standard rates. This reflects the lender's extra costs and risks involved in self cert mortgages. Typically down payments in the region of 20% of the loan value are required but some self cert mortgages are available for up to 90% loan to value.

All types of self cert mortgages (Capped, Standard variable Rates, Fixed Rates, Discount Mortgages etc.) are available.

Flexible self cert mortgages are best suited to the self-employed and others with irregular income. Flexible self cert mortgages allow those who expect to receive huge sums over the mortgage period to use those huge sums to repay all or part of the loan early. They also allow payment holidays and underpayments and even versatility to draw down additional amounts for those times when income is not so spontaneous.

Most self-cert mortgage lenders only accept business through authorized brokers. This is because the mortgage broker will carry out the detailed administration that would otherwise required of this type of mortgage.

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