Just because you cannot prove your income doesn’t mean you do not deserve the choice that other Brits have when looking for a mortgage. There are up to 12 million* people in UK who could be deemed ‘non status’ – their income cannot be proved and they cannot be given a status. As a result the self cert market has grown and there is a lot of choice out there when it comes to searching for a no proof of income mortgage. But what to choose? What type of no proof of income mortgage will be the best option for you?
A fixed rate is the most common no proof of income mortgage. It is a set headline rate for two, three, five or even ten years. Many non status borrowers choose this option as it means their mortgage has stability – lots of people who are self certified have enough ups and downs in the financial life, they don’t need their mortgage changing too. Of course, there are limitations to a fixed rate no proof of income mortgage – but if you want to be sure of your monthly payments then a fixed rate could be for you.
If you think that a fixed rate may be too constricting, then maybe a tracker no proof of income mortgage would be the better choice. A tracker is dictated by the Bank of England’s base rate – if it drops, so does your mortgage rate, but if it rises, then your rate rises with it. Recently the base rate has dipped to 5%, a historically low level for the UK, but there is no guarantee that that will not rise again towards 6% or even 7% in the next few years – but then no one can say it will not dip towards 4% in the near future either. A tracker no proof of income mortgage could possibly help you reap the rewards of the fluctuating UK economy, but it can also end up costing you more in the long run.
If you own your own business, or are just a prudent saver, then maybe you have money or other collateral tucked away – this nest egg can be used to get you a cheaper monthly rate in conjunction with an offset no proof of income mortgage. An offset deal means any equity you have – savings or investments or even physical collateral – can reduce your mortgage repayments if they are incorporated into an offset mortgage account. For example, if you have £20,000, then that can be offset against a £100,000 mortgage so as you only have to repay £80,000 of mortgage. The money sits in an account, so can be taken out at any time – it just the less you have offset, the more you have to pay at the end of the month. An offset no proof of income mortgage can be a great money saver – if you have the money to spare, that is.
Whatever you choose you must think carefully. Talk to an adviser and take stock – know what you can afford and do not over stretch yourself. A no proof of income mortgage can be a great tool to help those who cannot prove their wage, but the wrong no proof of income mortgage can be an unnecessary burden. So take your time and choose carefully.
Tags: mortgage, Selfcert, Selfcertmortgage