FINANCE SUPER MARKET

Both Self-cert and Sub-prime are significant sectors and it is anticipated both will continue to perform strongly. Gross lending in this particular sector is predicted to reach 26 billion GBP by the end of 2006. However both Self-cert and Sub-prime are also under scrutiny by the Financial Services Authority. There are currently about 4 million self-employed workers in the UK up from 3.2 million in 2000, according to the Office for National Statistics and an increasing number of people who rely on bonuses, commission or second incomes in addition to their basic pay.

UK working patterns are changing and multiple income sources are increasingly common. Datamonitor estimate some 6 million people are in employment types suited for Self-cert and forecasts 4.7% growth per annum to 2009. Market research organisation Datamonitor report that around 55% of self certified customers are self-employed, and another 34% are contract workers, seasonal workers and agency staff. That makes 89% of people in the self-certified market who fall outside the traditional employed status due to the way they work or earn their income.

Because of the looser qualification standards of the self certification mortgages, the interest rate is normally higher. You can typically reduce the interest rate a bit by having a larger amount to put down as a down payment on the home. Because of the higher interest rate, self certification mortgages are not normally the first choice for most people. If you can qualify for a loan through a more traditional method, you will probably receive a lower interest rate or qualify with less money down.

Many people choose self certification mortgages because, by including money earned from tips, bonuses or commissions, they will qualify for a larger mortgage than they would if only their base income was considered. If you receive a good deal of your pay from this type of contingent payments, then a self-certified loan is certainly a good choice. Unfortunately, some people consider a self-certified loan as an opportunity to receive a loan that there is no way they would qualify for. They exaggerate their income, either through optimism or greed, and, because of the lack of proof required in self-certified loans, quickly find that they are having trouble making their payments.