Self-Employed Remortgage
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Self-Employed Remortgage
Tom talks us through the remortgage process and how it works when you are self-employed.
Can I remortgage if I’m self-employed? Is it harder to remortgage if you’re self-employed?
Of course you could remortgage. As with any mortgage case, it ultimately comes down to the individual scenario, but there will certainly be options for what you want to do. Just speak to a broker and we’ll go through those options with you.
How long do you have to be self-employed to remortgage? Can you remortgage if you’re newly self-employed?
Most lenders are going to require two years’ worth of self-employment figures. Usually that’s evidenced by tax calculations and tax year overviews that you receive from HMRC.
Some lenders may want accounts and full tax returns, but we will confirm that depending on the scenario. A couple of lenders will consider the case with just a year’s figures on those tax calculations. On the flip side, there might be a few lenders out there that still require three or more years’ details.
In some circumstances, lenders could take more of a holistic approach for somebody that’s newly self-employed. For example, they might still be in the same line of work and have moved from an employed role to a self-employed role, or a subcontracting basis, but they’re doing the same thing. Lenders could take a view on that.
But if all else fails, your current lender will always offer a product transfer as an alternative option to a remortgage. That’ll at least allow you to secure a new fixed rate and avoid moving on to the expensive standard variable rate.
How does the self-employed remortgage process work?
It’s much like any other remortgage, really. We’ll start by assessing what the client wants to do – borrow more, change the term or keep things the same.
Then we’ll look to assess and verify affordability as usual, looking at the income and outgoings. Ultimately, it comes down to submitting the case for a full assessment and hoping to get a mortgage from a lender. Then the solicitor cracks on with the remortgage process from there.
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Can you remortgage with no proof of income?
For a full remortgage, no. We’re always going to need to verify the income for affordability on an application. But for a product transfer with your current lender, you won’t need to provide any proof of income. It’s just a case of just switching and selecting a new deal.
Affordability is not assessed – so it might be more suitable for clients that don’t have one year’s tax calculations. Or, perhaps they’ve had a bad year and the affordability isn’t quite stacking up.
As your broker we’d go through your income and outgoings to make sure everything remains affordable, and look at the right option from there.
Can I remortgage if I have bad credit?
Generally this will come down to the specifics of the case – how severe the adverse credit is, when it was registered and whether or not it has been satisfied.
Those things usually make a big difference on the lenders available to you and the rates you could obtain. I’d always recommend speaking to a broker – we will run through your credit file and position the case correctly to the appropriate lenders, to make sure you get the right deal.
Can a self-employed person be declined a remortgage for any reason?
They could, just as anybody else could be declined. It always comes down to affordability, credit or perhaps the property itself not being suitable. Those are the main things that could cause a decline.
How can I better my chances of a good remortgage as someone who is self-employed?
It’s just making sure you’re prepared. Have the tax documents ready, and make sure you’ve got a good understanding of your committed outgoings like loans, car finance and credit cards.
And just check your credit file before you come. See if there’s any bad credit there, have a quick look over it and make sure you know what you’re dealing with.
What are the benefits of remortgaging?
Usually it’s to secure the right rate that’s available to you at the time. We all want to save as much money as we possibly could.
But a remortgage might also allow you to borrow more money for certain things. You might need a little bit of extra cash for home improvements or other personal use, to buy a car, for example.
A remortgage could also allow you to reassess your situation. You might need to change the term of the mortgage. Some people might want to shorten the term to pay it back quicker, especially at the moment.
Others might want to lengthen the mortgage term, which will ultimately reduce those monthly payments. Although that will increase the overall interest you pay, it may make life a little bit easier for now.
How can a broker help with a remortgage for the self-employed?
Essentially, a broker is there to piece that puzzle together for you. When there are things that might be out of the ordinary, it could be more complicated to solve that puzzle – but we’re here to find the most suitable options for your situation.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
The FCA does not regulate some forms of tax planning, and we act as introducers for it
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