Non-status mortgages are designed for people who either cannot prove their income or who suffer from adverse credit. “Non-status mortgages” is a term that is loosely used to describe all mortgages that are not standard high-street mortgages.

Non-status mortgages for self-employed workers are also known as “self-certification mortgages”. This category of non-status mortgages require individuals to state their income to the lender without having to provide proof in the form of pay slips and other records of earnings.

The self-certification type of non-status mortgages usually require the borrower to fund a larger deposit that for standard mortgages. They are also known to attract slightly higher interest rates than standard mortgage products. In recent years, however, with non-status mortgages becoming increasingly popular, the interest rate disparity has lessened.

Borrowers who suffer from adverse credit may also apply for non-status mortgages. Adverse credit mortgages are a different type of non-status mortgages than self-certs, however they normally still require a deposit and attract premium interest rates.

The amount of interest charged on this type of non-status mortgages will depend on the level of adverse credit the applicant has on their credit history. Light-adverse applicants may only be required to pay a slightly higher interest rate than borrowers of standard mortgages, while heavy-adverse applicants may be required to pay an interest rate several percentage points higher than people with a clean credit file.

The non-status mortgage market has expanded considerably in recent years and borrowers can now choose from a full range of variable rate, fixed rate, capped rate, discount, and flexible mortgage products.

This is due to the fact that the demographics of the general population have changed considerably over the past decade meaning that fewer people than ever before qualify for standard mortgages.

There are more people than ever before working on a self-employed basis and who are unable to fully prove their income with pay slips. There is also a large, and growing, portion of the population who are subjected to some form of adverse credit on their credit files.

Mortgage lenders are therefore being forced to take notice of the non-status mortgages market to ensure they do not lose their customer base.

If you are looking to apply for any type of non-status mortgages contact an independent mortgage adviser for impartial advice.

UKMortgageSource provides up-to-date information on Non-Status Mortgages

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