For a long time self employed people, company directors, freelancers and people on bonuses have found it difficult to get finance for their home on a mortgage or remortgage. The problem is for tax reasons the self employed person minimizes their income however in many cases they will earn much more than can be proved through certified accounts or tax returns. Because traditionally a bank or building society will only lend you 3.5 X your earnings this limits the borrowing amount of self employed people, company directors, freelancers and people on bonuses to much lower than they can afford.
Another problem is that most small businesses don't keep certified accounts and thus cannot provide a mortgage lender with the required proof of earnings. New startups have a similar problem because many lenders require 2 years of certified accounts and a new business running for a year cannot provide these figures.
Luckilly for self employed people, company directors, freelancers and people on bonuses there is a specialized mortgage product called a self certification or self cert mortgage. When applying for an self certification or self cert mortgage the application just asks you how much you earn per year. The main difference here though is that you are not required to prove your earnings, the lender just trust what amount you disclosed to be correct.
Because a self certification or self cert mortgage or remortgage has higher risk for the lender most deposits for this kind of mortgage are 15% or 85% loan to the property value. Therefore if you want to purchase a property worth £200000 then you would need a £30000. In the high competition market we are in lenders are now offering self certs with even lower deposits and 90 or 95 percent LTV. For more details visit Self Employed Mortgages Loans