Self Cert Mortgage, Debt Risks

If you are self employed you may find it difficult to secure finance for a mortgage. Lenders may initially be suspicious of someone who can not provide proof of past wages and assurances of future earnings. Although getting a mortgage helps you to get associated further credit such as a secured loan, it is also easier to fall into mortgage arrears and end up with a bad credit rating.

However help is at hand from a self cert mortgage. This is where you tell the lender what your potential future earnings may be and they may award you with a self cert mortgage. This may be at a higher rate then a standard mortgage, but you must take into account the element of risk they are taking.

You may, due to unforeseen circumstances, fall behind on your repayments to priority debts such as a secured loan or mortgage arrears and find yourself being awarded a bad credit rating. This risk has to be reflected in the amount the lender charges. You can take out policies to protect you against unexpected illness or redundancy. These will cover your repayments in the short term but most policies only pay out for the first few months.

When you take out a self cert mortgage or secured loan make sure you have sufficient cover in case of the unexpected. This could be a lifeline between keeping your home and losing it due to mortgage arrears. If you ends up with a bad credit rating, it will make it conceivably harder to gain credit off other sources.

Good advice is to be realistic when you apply for credit in the first place. Heavily over estimating your possible future income could back fire and cause you to accumulate debt far more quickly. Do some contingency planning. Store up some savings for a potential ‘rainy day’. Most financial problems can be temporary if you can find a way to carry on through hard times.

Budget for what you can afford and keep a check on your spending as it is tempting to buy goods when you get a mortgage.

We can not promise you a Mortgage BUT we will listen no matter what your circumstances are.

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ABBEY FINANCE

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Actual rate available depends on circumstances ask for personalised illustration. The overall cost for comparison is 7.9% APR. Our representative fee charged is 1.25% of amount borrowed. APR variable and based on a usual case.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE