Self-cert Mortgage Deals Almost Unavailable

Latest overview of the British mortgage market showed that the number of self-cert mortgages reduced almost to zero, which means that self-employed Brits and those with irregular income have almost no mortgage options left. According to the revealed figures, the market share of self-cert mortgages, which amounted to 10% last year, shrank to only 2% in 2009 (or 22 fixed-rate self-cert mortgage deals vs. 55 last year). Also, all SVR self-cert deals disappeared. Industry specialists are determined that the change is to be blamed on the restrictive lending policies as well as on exclusion of self-employed borrowers since they have been placed in high-risk group. Mortgage brokers say that banks, in their effort to “de-risk” lending, decided to abolish self-cert mortgages as self-employed borrowers are, by definition, considered to be the most risky customers. Let us remind that prior to the economic downturn, the British mortgage market offered as many as 247 and 134 fixed and variable deals accordingly; self-cert mortgages accounted for 17% of all UK mortgage lending. The majority of high street lenders (banks and building societies) that previously offered self-cert deals, such as Alliance & Leicester, have completely seized this type of mortgages, while some specialist lenders, such as the Mortgage Works and BM Solutions, remained. The deals currently available from them are: - The Mortgage Works: 2-year fixed deal at 6.74% with a 2.5% property loan fee or 7.24% with a 1.5% property loan fee. The max. LTV ratio available is 65%. - BM Solutions: 2-year fixed deal at 5.49% and 3-year fixed deal at 5.99%, both of which are offered with a min. of 1% property loan fee. The maximum LTV ratio available is 75%. Even though self-cert mortgages were a tool for abusive borrowers to get their mortgage loan, the total abolition of them now means that honest self-employed borrowers find themselves in an even worse situation than first-time buyers as only a limited number of lenders offer self-cert mortgages at absolutely uncompetitive rates.