Remortgage When Self-Employed

How does the self-employed remortgage process work?

Lenders will typically ask to see your tax calculations together with your corresponding HMRC tax year overview forms. They may also want copies of your business accounts or a certificate from your accountant.

These are all things that we could help you prepare for when you’re looking to do the mortgage application.

Can you remortgage with no proof of income?

Unfortunately not. A mortgage is like any other loan, and the lender wants to make sure you could afford the repayments. They want evidence that you’ve got some sort of income.

If you’re employed you would have pay slips, but if you’re self-employed, lenders normally look at what you’ve declared for tax purposes. It’s to demonstrate that you’ve got some sort of income and could afford those payments.

Can I remortgage if I have bad credit?

Potentially, yes. There are lenders that will consider a mortgage for people with bad credit, and we could definitely help review your options.

It really depends on what the bad credit is, and it’s always a good idea to get your credit report – whether it’s good or bad. It shows us the information the lenders are going to be looking at.

You might think you have really bad credit, and that no one’s going to help you. But some lenders may be happy to accept you, especially if it’s a one-off issue.

Can a self-employed person be declined a remortgage?

You wouldn’t get declined just because you’re self-employed. It would usually depend on other factors. It might be that you’ve had difficulty proving your income, as lenders look at what you’ve earned over the last two years.

You might be trying to use your latest year’s income but you’re not able to demonstrate that to a lender. That might be why the lender is unable to accept the application. Or it could be that your income is not enough to borrow your current mortgage balance. It depends on various different factors.

How can I better my chances of a good remortgage as someone who is self-employed?

Definitely get your credit file and check that regularly to make sure that the information there is correct. All lenders will carry out a credit search, so it’s important to know what they’re going to see.

It’s also a good idea to make sure that you’ve provided your accountant with everything they need to finalise your accounts. There’s nothing worse than someone finding a property to buy, but they haven’t spoken to their accountant – who needs a lot of information to get the accounts ready in order to provide proof of income. The earlier you get things moving, the better.

What are the benefits of remortgaging?

A remortgage is like a review of your mortgage. It’s always a good idea to look at it, because your income might have changed or you might be looking to borrow more money.

We help you look around and compare lenders. You might be able to pick a lower rate and reduce your monthly costs – or you could change the mortgage term. You could increase it to reduce your outgoings, or reduce it to pay the mortgage off sooner. It depends on your budget. But it’s always a good opportunity to reassess your finances.

How can a mortgage broker help if somebody is self-employed and looking to remortgage for the first time?

A good mortgage broker will help review all your mortgage and your protection needs. Unlike going direct to a lender, if interest rates reduce we could look to switch you onto a better deal.

Although lenders are not obliged to tell you if they subsequently reduce their rates, we’re always looking to see if we could save you money and get you the best deal available to you.

Not all lenders are the same. For example, if you’re a limited company, most lenders will look to take an average of your latest two years’ basic salary and dividends. Others may take an average of your basic salary and the company’s pre or post-tax profits. So there could be quite a big difference in what you could borrow from one lender compared to another.

It’s definitely worth speaking to a good mortgage broker with access to lenders that look at things differently. A broker will save you a lot of time, because we talk to different lenders even before you make an application.

You’ll have a good idea of which lenders are more likely to accept your application – as opposed to going to one particular bank. If they say no, you’ve got to go through the whole process all over again. Speaking to a broker is always a good idea.

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.

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