Background

The first of these mortgages appeared about a decade ago and were designed to help self-employed borrowers who kept being turned down for more traditional loans. The self-employed people were often out in the cold because they had begun their businesses very recently and didn’t have the standard three years of accounts to show lenders when they applied for loans. At the same time employees who had several jobs or relied on regular bonuses or overtime to boost their basic wage also risked being refused by traditional lenders. Self-cert deals allowed both types of borrower to state their own incomes on the application forms on the understanding that they wouldn’t have to find the paperwork to back it up. It all worked well and the mortgage market finally caught up with the way increasing numbers of people earned a living.