Tips, Tricks, Info and News About the UK Finance Industry.
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If you’re currently renting or leasing a residence, you probably often think about how wonderful it will be to actually own a place of your own. You could finally paint the walls that shade of beige that you love, remove the shaggy carpet and replace it with laminate, and not have to worry about every scratch your cat makes in the paneling.
Additionally, it’s no secret that renters essentially throw away thousands of dollars every year without getting the benefits (such as tax breaks) afforded to homeowners. But what if you are self-employed and make only an estimated salary? What if you’re a self-described “freelancer” or consultant? Never fear! There are self certification loans geared just for you!
Self cert loans are offered by many financial institutions as a way for the self-employed (or those who cannot prove income for the past three years) to borrow funding to pay for homes or other items. After all, without official “pay stubs”, many banks and lenders will not even consider a loan application; thus, self certification loans open the door (perhaps even the FRONT door to a new home!) for persons of all ages, backgrounds, and experiences to afford their own lovely digs.
With a self-cert loan, the customer or loan requester is expected to basically “self certify” how much he or she makes annually. (Remember the “honor system” in school or with friends? It’s a similar process.) For a self-employed man or woman, this is accomplished by mathematically developing an estimate of expected income flow.
Of course, some individuals who choose the self employed loans routes also ask for the assistance of a professional accountant to help verify income amounts and expectations. This eases the burden of trying to come up with a figure themselves, and some lenders who offer self certification loans may decrease the interest rate slightly as a result. Though it costs a bit of money (professionals never work gratis!), it’s a good investment if a self certification loan is your goal.
Speaking of interest rates, interest rates accompanying such loans are notoriously higher than average interest rates. However, this is completely understandable, as self cert loans are a bit riskier for the financial institution. It’s rather like the “honor system”, and whenever such a system is put into place, there is room for chicanery.
In the end, if you’re interested in pursuing loans, don’t hesitate. Even if you’re not quite ready to move, it’s a great time to investigate self cert loans so you have all the information beforehand. The time has never been better to take out loans, and global competition has lowered rates considerably (thanks to the Internet.)
Never allow your incorrect perceptions (“I could never own a home and I’m going to be stuck as a renter forever. I don’t have any pay stubs, so no financial institution will even consider me!”) to become your reality. You CAN own a residence, whether a condo, townhouse, apartment, single family dwelling, or even house boat!
