| It
is at present confusing for the self employed to fully understand
exactly where they stand when needing a mortgage, remortgage
or a secured loan.
In the
past, the self employed were almost at an advantage compared
to employed people when making am application for a remortgage,
mortgage or a secured loan, as they could self declare their
own income, unlike employed applicants for these home loan
products.
While
the employed had to be truthful about their earnings, as they
had to provide wage slips when applying for these loans, the
self employed simply had to provide what is widely known as
a self cert.
This meant
that no self employed applicant would ever be declined for
a mortgage, secured loan or remortgage, at least not on the
grounds of having insufficient income, that is unless he or
she was rather dim witted.
There
was even one lender at that time, namely Future Mortgages,
who even accepted self certs from employed secured loan borrowers.
The only
check that they made for these self cert employed applicants,
was to telephone the company where they were employed to ask
if the applicant did in fact work there, and that it was not
pure fabrication.
Future
did not ask the employer to confirm the income, and sometimes
someone flipping burgers had an income higher than a teacher.
It was
of course very tempting for people to increase what they earned,
to obtain the mortgage they wanted to buy the home of their
dreams.
The same
thing happened when applying for a remortgage or a secured
loan that they could use to release equity on their property
to use for almost any purpose, including making use of remortgages
and secured loans as debt consolidation loans.
In the
course of the recession, the accepting of self certs, when
making application for any mortgage product stopped 100%,
and the self employed then needed, as they do to this day,
either full accounts or an accountant's certificate to prove
their true earnings.
The secured
loan lender, Nemo, who had at one point accepted self certs
for homeowner loans at up to 100% LTV, ceased granting loans
to the self employed.
Secured
loans have always continued to be available from one lender
on a self cert basis at 50% LTV, and high interest rates apply.
Matters
are now looking up some what for the self employed, with Nemo
now advancing loans at 75% for the self employed, although
an accountant's reference or accounts are needed.
Link Loans
has a plan at 75% LTV also for those who own their own business,
but they require the same income proof as they do for Nemo
Loans.
However,
Link does have a very useful and unique plan for those who
do not have full accounts, as they have a loan plan for homeowners
who have only been trading for at least six months and who
have a maximum LTV of 60%. Three months bank statements are
asked for which must show how much the applicant is earning.
Therefore,
although we are no where near the slack hay day of self employed
loans, things are at least moving in the right direction.
However,
accounts or an accountant's certificate are still required
when applying for mortgages and remortgages.
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