NON STATUS MORTGAGES

People who cannot prove their income or who suffer from bad credit will often apply for non status mortgages.  Non status mortgages are a term that describes a mortgage that does not fit into the traditional ‘main stream’ mortgage.  Another term for the non status mortgage a self employed person may seek is self certification mortgage. 

The self certifying type of non status mortgage allows a person to state their income to the lender without providing pay slips and other records of earnings to verify and prove the income. 

Often the borrower is required to place a larger deposit down on the mortgage than a standard ‘main stream’ mortgage will require and the interest rates on the loans were high.  Recently; however, non status mortgages have increased in popularity resulting in the interest rates lessening.

People who have bad credit also apply for non status mortgages; however, the type of mortgage sought in this case differs from the self certifying mortgages for the self employed.  The one similarity is the large deposit that is generally required and the high interest rate that occurs. 

Whereas the interest rate for a self certifying type of non status mortgage can be lower, with bad credit situations it usually remains high.

The interest charged on a non status mortgage due to bad credit often depends on the severity of the bad credit.  A simple poor credit history may only be required to pay only slightly elevated interest rates.  People with seriously bad credit should expect to have to pay a significantly higher interest rate than what is expected on a mortgage given to people with clean credit reports.

Due to the demographics of the general population changing over the past decade, few people are qualifying for the standard mortgage. 

 This has caused the non status mortgage market to expand and this resulted in borrowers being able to choose from a range of perks including variable, fixed or capped rates, discounts and flexible payment plans.

The demographics that are changing so drastically is in the manner in which people live and work.  More people than ever are working on a self employed basis or doing a number of freelance type jobs that do not provide the documentation that is necessary for standard mortgages.  Additionally, people owe large amounts of money due to debt and have less that desirable credit scores.  This has forced lenders to change the way in which they conduct business and make provisions for people through non status mortgages.  This ensures they continue to have a customer base and ensures they too have an income.

If you are in a situation where you have bad credit or are self employed you may want to first seek the advice from a professional mortgage broker to determine what best fits your unique situation.  This will help you to find the best mortgage and the best deals and interest rates to turn your mortgage dreams into mortgage realities.