Self Employed, Remortgage
The mortgage market has changed a lot in recent years, and that includes self-employed mortgages.
Once upon a time, remortgaging your property as a self-employed person often involved a long, drawn-out process with no guarantee of a good outcome. Now, however, the majority of lenders are much more open to accepting applications from self-employed people, a sole trader, contractors, freelancers and limited company directors – as long as they satisfy their eligibility criteria.
Read on to discover what to expect when you need to remortgage your property and how the team here at CLS Money can help you make the right decisions at such a crucial time for you and your family. There's a great mortgage deal waiting for all self employed mortage applicants, with a little bit of help from CLS's expert mortgage brokers.
When do you need to remortgage?
Remortgaging a property is the process of applying for a mortgage with a new lender (or with the same lender) without physically moving between locations.
There are a few reasons why you may be considering remortgaging your property. Maybe you simply want to get a better deal that you get from your current mortgage and take advantage of cheaper rates elsewhere. Perhaps you need to raise money for home improvements and other large purchases. You can do this by releasing cash from your existing mortgage and upping your monthly repayments or the length of their mortgage term as part of a revised agreement. Alternatively, you might be looking to make changes due to changes in your future income or credit rating.
Remortgaging can also be a way to consolidate other existing debt and pay it off within your monthly mortgage payments. However, although mortgage interest rates are often lower than on personal loans, you could pay more overall if you choose to take the mortgage out over a longer term.
If you’re looking to remortgage your property, the cost of your new agreement will be one of the biggest factors in your decision-making process. But there are other things to think about – such as whether the mortgage is portable, whether the mortgage lender will allow you to overpay on your repayments, what the exit fees are, and whether the term length suits your needs.
How can being self-employed effect your chances of getting a new mortgage?
You will be considered self-employed if you own more than 20 to 25% of a business from which you earn your main income.
If you are a self-employed worker, remortgaging with some of the main high-street lenders can be a challenge. This is because you are seen as a riskier candidate; the company will perceive you as having a less reliable income and will be concerned about your ability to make your monthly repayments.
The good news is that plenty of specialist lenders in the market are happy to lend to self-employed customers with a self-employed income. You’ll need to be prepared to provide a series of evidential documents to prove your income, and, when approaching a mortgage provider, you will usually need to have the following to hand for the best chance of achieving that sought after mortgage approval:
- Two or more years of certified accounts
- Evidence of upcoming contracts (if you’re a contractor)
- Evidence of dividend payments or retained profits
- Recent SA302 forms, tax return, or your tax year overview from HMRC
Further to your official documents, you'll be expected to provide bank statements with your self employed mortgage applications, and any new or existing lender will still make checks on your credit score to get a clear picture of how you manage your money.
If you’re self-employed and looking for a new mortgage, we highly recommend working with a specialist broker who can identify and approach the lenders who will be more accepting of your circumstances and more willing to offer you competitive rates and terms.
Why use a mortgage broker?
As a leading mortgage broker, you'll get your own highly experienced mortgage advisor, who knows exactly where to look for your most suitable self-employed remortgage deals in your personal circumstances. Because they access the whole of the market for the widest range of mortgage lenders – not just a select pool of providers like your typical mainstream lender – they can compare what’s on offer from various companies to find you the best possible deal.
We’ve made it incredibly easy to work with us, too, especially with the remortgage process. Not only will you be able to recieve professional advice from our team whenever you like – even in the evenings or at weekends – you’ll also have access to your very own customer portal, where you’ll be able to upload important documents and keep track of your application in real time.
Contact us now to set up your free consultation and see just how well our best mortgage deals compare to your current lender.