| Non status mortgages are specific lending instrument | | | | As you might expect, such loans are not generally |
| designed to allow individuals who are unable to | | | | handled by traditional banks and generic lending |
| establish normal income to qualify for a loan. This | | | | agencies, but are only available through specialized |
| mortgage type was originally intended to provide loans | | | | financial institutions and mortgage brokers. |
| to people who owned their own businesses or were | | | | Correspondingly, the cost associated with non status |
| self-employed in some other fashion. Recently, | | | | mortgages is generally going to be at least a bit higher |
| however, the qualifications have been expanded to | | | | than a traditional instrument. However, if you can |
| those who earn additional income through a second | | | | establish your income through tax records or sales |
| job or by working at home, and individuals whose | | | | receipts, such loans can still be obtained for a very |
| income can fluctuate drastically from month to month, | | | | attractive price. As a general rule, the lender will require |
| such as commissioned salespeople. | | | | that the borrower supply at least 20% of the equity of |
| Now commonly referred to as a self certification (or | | | | the property being mortgaged up front. Although it may |
| self cert) mortgage, non status mortgages became | | | | seem easy to exaggerate one's income during the |
| regulated in 2004 by the Financial Services Authority, | | | | application process, it is vitally important that the |
| and the application requirements were changed at that | | | | borrower be completely honest about their expected |
| time. Previously, a prospective borrower could apply | | | | income stream. |
| for the loan without any form of financial disclosure at | | | | While it will generally be easier and more cost |
| all. Understandably, this system became the subject of | | | | effective to obtain a traditional loan if possible, non |
| considerable abuse and a fair degree of fraud. New | | | | status mortgages may be the only option for some. |
| regulations now require that an applicant disclose their | | | | Those who work freelance or have a 'feast or famine' |
| income before a loan can be approved, but proof of | | | | income stream may have absolutely no choice but to |
| such income is still not required. | | | | pursue this type of financing. |