Remortgage when Self-employed

Can I remortgage if I’m self-employed? Is it harder to remortgage for the self-employed?

Of course – you can remortgage if you’re self-employed, employed or have more than one occupation.

Just to explain who we’re talking about here, someone who is self-employed runs their own business to generate income and submits tax returns at the end of the financial year.

You might be a sole trader; an individual that owns their own businesses, such as an electrician, plumber or handyman. Or, you might own your own limited company, taking an income through salary and dividends and producing company accounts. You may have people in a partnership with you – which is common in the legal sector.

However your business is set up, we’ll need relevant documentation to help you remortgage onto a better deal. It’s not really any harder, we will just ask you a few more questions to understand your income and your circumstances.

How long do you have to be self-employed to remortgage? Can you remortgage if you’re newly self-employed?

It’s a good question, because we do help customers get a mortgage while they’re employed, and then two or three years down the line, they decide to start a business.

We’ve had someone open a fast food outlet. We’ve had people in the IT industry who decide to become contractors. The most recent example is a plumber who was employed by a firm and then set up his own business.

Typically, you need to have been self-employed for at least a year. In the examples I just talked about, all those customers had been in the same line of work for the last two or three years – and some lenders will ask for that track record.

If you have recently started a business and you have one year’s worth of accounts, we can still help – but the number of lenders available will probably be limited. We know the lenders, their criteria and what they’re looking for. Sometimes we need to have a chat with the lender – they’ll say yes or no and we’ll go from there.

If you’re newly self-employed we will still need at least one year’s worth of accounts to prove your income.

We do work with a few Uber drivers who really work hard and are classified as self-employed. They do their tax returns as a sole trader – we can take that income into account as long as it’s been declared on the tax return. As long as we have at least a year’s income figures to work with, we can help.

How does the self-employed remortgage process work?

It always starts with a phone call or email to us. We will just ask you some questions to understand your circumstances and what you want to achieve.

We might then request more information or documentation to prove your income. We can speak to your accountants if you pass us their details and give us consent to talk to them.

We obtain your documents and look at your credit, your outstanding mortgage and whether you want to borrow more, change the term or choose a new method of repayment. We’ll ask all those questions and then do some research.

Whether you’ve recently opened a business, or you have declining or increasing profits, we’ll be able to look at all of that to find a lender to remortgage with.

We present you with the solutions at a face to face meeting or a Teams meeting. You can ask as many questions as you want – we’re here to answer them and take you through the whole process, with personalised advice.

Can you remortgage with no proof of income?

Remortgaging means moving your mortgage from one lender to another. Any lender on a residential mortgage will need proof of your income. They need to be certain you can afford to pay the mortgage.

After the subprime crisis we had a lot of regulation changes so that people can’t self-certify their income. Mortgage providers tightened up their lending policies, so you can’t remortgage without proof of income.

But because you already have a mortgage, if there are challenges around your income we can do something with your existing lender – to organise a new deal or a new rate. If you want to borrow any more money, though, you will need to be able to prove that you can repay the mortgage.

Can I remortgage if I have bad credit?

Yes, you can remortgage with bad credit. Part of our process is to request a credit report from Checkmyfile, which gives us an indication of the credit you have outstanding and how well you’ve been maintaining it.

We assess that before finding a lender, because if you’ve had a missed payment on a credit card, you’ve got an arrangement to pay, you have outstanding credit, loans or hire purchases, we need to know. There’s no point in applying for a mortgage if you’ve had a credit blip that the lender doesn’t accept.

We will tell you if the most competitive lenders won’t accept your circumstances. We can go to another lender who will accept your credit situation.