Pros and Cons of a Non Status Mortgage
If you are self employed and have a fluctuating income or get you income from different sources, a Non Status Mortgage may be the best loan option for you. Getting an approval on such a mortgage is subject to the status of your finances, assets and your ability to pay back the loan or make payments on time.
What is a Non Status Mortgage?
A Non Status Mortgage is type of mortgage, where the lender is willing to give the borrower a loan without his having provided the standard documentation and proof of income. All that is required is a deposit of money that can range to be around 20% of the mortgage debt and a self certification from the mortgage holder in regards to their income.
Who Needs a Non Status Mortgage?
There is a sector of people in the UK who are not able to give sufficient proof of their income on account of being self employed or working freelance. You could also be a good candidate for a Non Status Mortgage is you get your income from a wide variety of sources and are unable to document and support your income claims to the satisfaction of a standard mortgage provider.
If you are a contract worker or are an unsalaried individual such as a company director, you could be eligible for a Non Status Mortgage. You could also consider this option if you have a bad credit history or if you do not have two year’s worth of income certificates.
You could also consider such an option if you work on a commission based job.
Pros and Cons of a Non Status Mortgage
A Non Status Mortgage is one of the very few loan options open to the self-employed and people with multiple streams of indefinite income.
It must be noted that such Non Status Mortgages are not easily approved and usually come at high rates of interest on account of the risk that the lender is taking in giving you a loan. Also, such loans are not openly offered and are best garnered through a mortgage broker.
Decisions on these loans are left to the discretion of the bank and depend on your ability to certify your income and make payments. Also mortgage providers tend to prefer not to give out such loans as they are high risk and tend to be overly cautious of Non Status Mortgage seekers. However, in the past couple of years, fluctuations in the market have caused mortgage providers to be more open to Non Status Mortgage seekers and offer competitive rates of interest.
Another con where the Non Status Mortgage is concerned is that the value of the mortgage is usually considerably smaller than the typical Standard rate mortgage. It is also possible that you incur a big penalty fee on your mortgage if you are late in making your payments.
A Non Status Mortgage is a complex package and you will need to sit and discuss your finances with a mortgage broker or accountant to see how best you can approach a mortgage provider in the UK.