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Non Status Mortgage

A non status mortgage is more commonly known these days as a self-certification mortgage. These are designed for those who find it difficult to prove their income such as the self-employed and contractors. The idea is that lenders that write a non status mortgage will require less proof of income than they would for a standard home loan. The borrower of a non status mortgage effectively certifies their own income. A non status mortgage was an incredibly popular product before the beginning of the financial crisis. Now though, those applying for a non status mortgage will often find their application a non starter.

Many people think that the ease with which a non status mortgage could be written in the years running up to the beginning of the credit crunch played a big part in the collapse of western banks. In 2007, a self employed person would be able to secure a mortgage to the value of 110% of the property he or she was planning to buy with next to no checks being made as to whether repayments could be made. Unfortunately, everybody now knows how that ended. As a consequence of all this, a non status mortgage along with unemployment mortgage protection cover is now a lot more difficult to secure. As mentioned above, any application is likely to be a complete non starter if you do not have your books made up for at least the last three previous years and are able to prove that you will be able to make your mortgage repayments. You really do have to prove your status now.

New Rules

If you're thinking of waiting until the banks start to relax their lending criteria before making an application for a non status mortgage, think again. Although many bankers would probably like to return to the days of writing mortgages left, right and centre, the Financial Services Authority has other ideas. The FSA announced the results of a review in 2011 that was designed to make sure that the banking collapse of the final years of the first decade of this century can never be repeated. These new rules come into force in 2013. They will compel banks to look more closely at all mortgage applicants and require borrowers to prove how they will pay back their loan. Any non status individuals will also have to prove that they would be able to carry on meeting their mortgage payments if interest rates were to rise by 1%. So, it's more than likely that it will become a lot harder in the future to get a non status loan, not that it's too easy now.

Non Status Qualification

To take out a non status home loan now, it's likely that you'll need a large deposit of considerably more than the average 20% that banks are currently after. You'll also need an impeccable credit record and, as mentioned above, meticulously kept financial records. If you do not have all of these, it will be most unlikely that you will be offered a self-certification mortgage. If you think that you are a good candidate, it would be a good idea to apply for a loan before the rules change in 2013. Once they have altered, you will find it a lot hard to get your application accepted. Once the new rules have come into force, you will not be penalised for your status if you have already got a loan in place. If you are thinking of making an application, check your credit file to make sure there are no mistakes on it. The slightest error could scupper your chances of being accepted for a loan. You really will need to be quite fastidious about making sure all your affairs are in order if you're going to secure a self-certified home loan.

You can get the ball rolling by using an online home loan quote comparison service to get a feel for the market. These will have a selection of non status mortgage professionals call you up to discuss your options. You'll be able to find out if it's likely that you'll qualify for a loan or whether you'd be better advised to explore other funding options. As long as you provide an honest appraisal of your situation, you should get an accurate picture of what sort of loan, if any, you might be able to get your hands on. Talk to as many companies as you can to get a broad view of your situation. It may seem unfair, but the mortgage market has tightened up considerably, unfortunately to the detriment of those that may have trouble proving their income. Even if you would have no trouble making your payments, you may still have trouble getting a loan. You won't know though until you've asked for some quotes.

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