Self Cert Loans - Financing the self employed
A self employed person has many advantages, but securing a loan can be more difficult as such people are seen as high risk because of their incomes being variable and having no guaranteed pay cheques.
Average income is used as a guide line by the lender and if this is hard to ascertain the lender has difficulty finding a basis on which to make a loan. Add to this self kept records which need verifying and it is understandable that some lenders refuse to take the risk.
As self employed people are high risk it is probably best for them to have a secured rather than an unsecured loan. Putting up the collateral for a loan minimises the risk for the lender.
Self certification or self cert. loans are often harder to come by and dearer than other forms of loan, especially if the person has a poor credit history and credit rating.
However all is not lost as banks and lenders, over recent years have had to relax their criteria in order to gain custom.
There are a number of specialist lenders coming into the market especially to deal with loans for the self employed who have a less than perfect credit history.
When applying for a self cert. loan be prepared, there are lenders willing to help and rates have improved.
This is the information a self employed person needs when applying for a loan:
- Current accounts
- Tax returns for at least two years ( if possible )
- Proof of any additional income
- Banking statements for the last twelve months
- List of assets, including bank accounts
- Copy of your business licence
- Current debt information, including creditors’ names, contact information - and mortgage statements
- Proof of any child support or alimony paid out
- nformation on the rent or ownership of building properties
- For unfavourable or no credit, proof of some revolving credit or utility receipts.
If you have done your homework and present a fully documented case, there is no reason why you cannot secure a self employed loan. Present the facts with confidence and you should have no more difficulty than an employed person.
Use of this article or exerts thereof without the prior permission of the author is unlawful and will result in prosecution, if you wish to use the article please contact info@selfcertmortgageuk.co.uk.
