Remortgage When Self Employed
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Remortgage When Self Employed
Harry explains how the remortgage process works if you are self-employed.
Is it harder to remortgage if you are self-employed?
No, it’s no harder to remortgage if you’re self-employed rather than employed. The process is very similar if not the same.
It’s really just that the documents required might be considered a little more onerous, as evidencing your income isn’t as simple as providing a few payslips.
But as a mortgage broker, our job is to make the process as easy and as straightforward as possible. We’d guide the client through the whole journey and do most of the heavy lifting.
How long do you have to be self-employed to remortgage? Can you remortgage if you’re newly self-employed?
The majority of lenders are going to require two years worth of tax calculations and overviews to remortgage to them. A small number of lenders can work off one year’s self-employed history. Any less than this, for the most part, isn’t workable.
But as a broker we could still help out, as your current lender could offer you a product transfer if remortgaging would not be doable.
How does the process work if you are self-employed and looking to remortgage?
We would submit an application to the lender and they would then underwrite this application. They’d value the property and complete their due diligence before issuing the mortgage offer – it’s no different from the process for anyone else.
Can you remortgage with no proof of income?
Unfortunately, not. The lender would require evidence of income in the form of tax calculations and overviews, or limited company accounts – or even both. Some lenders may consider one year’s figures with a projection of two years’ income from your accountant. So a minimum of one year is required on this one.
Can I remortgage if I have bad credit and I’m self-employed?
Yes. As previously mentioned, the process involves submitting an application to the new lender, which would be underwritten and assessed. This does usually involve looking at your credit.
Each lender has different criteria surrounding credit scores. So if a client does have poor credit, there are still a lot of options. We’ve got access to lenders that don’t actually search credit score, where eligibility is based on credit conduct alone. Different elements of adverse credit will be acceptable to them, such as CCJs and defaults.
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Can a self-employed person be declined a remortgage?
Yes, they can, but that’s irrespective of whether they are self-employed or employed. Anyone can unfortunately be declined for a remortgage.
It could come down to a lot of factors, ranging from the property itself, affordability or credit scoring. But that said, as brokers we do extensive research and would never recommend a lender if we thought you’d be declined.
How can I better my chances of a good remortgage as someone who is self-employed?
Having proof of income up-to-date and ready will massively help. A good example is perhaps making sure your council tax is paid, and that there are no outstanding payments on your tax year overviews.
Having all your ducks in a row, with an accurate breakdown of outgoings and commitments also helps considerably. It allows us to give exact figures to the lender, so gather a list of your regular commitments such as direct debits and bills – preferably to the penny.
What are the benefits of remortgaging?
There can be lots of benefits to remortgaging to another lender. The most obvious is that the new lender may be offering a cheaper interest rate than the existing one. In cases like this, our recommendation would be to remortgage as the savings over the long term could be substantial.
Also, the new lender could be offering incentives that align with your preferences at the time. For example, they may allow large overpayment facilities which the old lender didn’t have – or even good cashback for remortgaging to them.
As a broker we research all the options to highlight the benefits of remortgaging, so you can make an informed decision.
How can a mortgage broker help with the remortgage process?
A mortgage broker can help significantly during the process, there’s no doubt about that – whether it be sourcing the best true-cost options with other lenders, to actually packaging the mortgage and submitting the application itself.
It’s not something that a lot of people may have the time to do, and obviously we do this day-in, day-out. Ultimately the goal is to make the process as stress-free and seamless as possible, and to source the most appropriate product at the best cost.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £99 to £549, and this will be discussed and agreed with you at the earliest opportunity.
Asset Harbour Mortgage & Protection Ltd trading as Asset Harbour Mortgage & Protection are an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.