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Back in 2009 the Financial Conduct Authority (FCA) put an end to self-certification mortgages in an attempt to ensure that all borrowers prove their ability to repay in advance.
Self-certification mortgages were originally aimed at the self-employed, freelancers and contract workers who had trouble proving their income and in many cases became the mortgage of choice for contractors on irregular income who struggled to secure mortgage borrowing with their bank.
However, with the removal of these specialist mortgages many contractors worried it might be difficult to secure mortgage funding for new properties or even refinancing with their own mortgage providers. We are very happy to announce that this needn't be the case as many lenders are happy to lend to contractors who have had a contract for as little as six months.
This new flexible approach must in some way be due to the huge demand and move to contracting for so many people plus the higher daily rates independent professional often earn compared to their permanently employed colleagues.
SJD recommends specialist mortgage company CMME, who can help you secure mortgage borrowing with high street lenders taking the whole of your contract earnings into consideration.
Click here to use our Contractor Mortgage Assessor and see how much you could borrow.
Andy McBride, Director at CMME commented “The fact that so many self-certified mortgages were granted to employed workers who could prove their income, and the high level of arrears associated with these type of loans shows that self-certification mortgages were being abused by both individuals and brokers. At CMME, we wouldn’t advise a professional Contractor or Freelancer to go down the self-certification route, if you approach a specialist contractor mortgage broker then they should be able to secure you a competitive mortgage that is based upon appropriate evidence of income.”
“It is the opinion of CMME that the FCA are correct to tighten up lending criteria, as any Contractor or Freelancer that can adequately afford a mortgage should have no need to go down the more expensive self-certification route to secure borrowing”.
You may also find our other contractor mortgage guides and calculators helpful:
SJD are not authorised to offer regulated mortgage advice. SJD Accountancy Ltd is an Introducer Appointed Representative of CMME. Your home may be repossessed if you do not keep up repayments on your mortgage.
CMME is a trading name of CMME Mortgages and Protection Limited. Authorised and regulated by the Financial Conduct Authority (FCA reg. 414798). Registered in England No. 04886692. Registered Office: 2 Glass Wharf, Bristol, Somerset, BS2 0FR. Please be aware that Commercial Mortgages, Overseas Mortgages and some Buy To Let Mortgages are not regulated by the Financial Conduct Authority. Calls may be recorded for training and security purposes and to improve the quality of our services.
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Appointing an accountant can save you time and stress when starting up on your own. If you would like to speak to someone about any of the above information or any other queries you may have, arrange a callback and a member of the team will be in touch.