Pink Home Loans has teamed up with Verso with the introduction of the exclusive self-cert mortgage.
The product has a fixed rate of 5.98 per cent for the first three years of the mortgage for loans of up to 85 per cent of valuation. Pink Home Loans has targeted the mortgage at self-employed people who can have difficulty in getting a mortgage because they can have trouble proving how much they earn. After the three year fixed rate period the interest rate reverts to 1.98 per cent above the Bank of England base rate.
Applicants must be able to supply proof that they have either been self-employed for two years, or have been working with their employer for at least six months. Three months bank statements are also required. The mortgage has a redemption penalty of five per cent of the advance during the fixed rate period.
According to Datamonitor more than eight million people in Britain are now employed on a contract basis and are eligible for a self-cert mortgage. Just 18 per cent of the self-employed market has a mortgage, compared to 41 per cent of the employed market.
Looking at the market, according to Moneyfacts on June 12, 2001, the most competitive three-year self-cert mortgage is from Exclusive Connections. This has a fixed rate of 5.89 per cent until August 30, 2004 for loans of up to 75 per cent, after which it reverts to 1.75 per cent above the Bank of England base rate. Applicants must have been either self-employed for three years or employed for six months. The mortgage also has redemption penalties of five per cent of the advance for the first two years and four per cent for the third year.