Remortgaging When You’re Self-Employed

If you’re self-employed, remortgaging can provide a very welcome opportunity to save some money on your monthly mortgage repayments, at a time when trading conditions have been pretty tough for so many.

This guide offers all the information you’ll need on how to do this, why it might be a good idea, and what you need to be aware of before submitting an application.

Can you remortgage if you’re self-employed?

Yes, of course you can. Working for yourself doesn’t prevent you from remortgaging any more than it stops you applying for a mortgage in the first place.

As long as there’s plenty of equity in your property and you’ve been a responsible borrower with a good credit score, you should be in a strong position to qualify for the best deals available.

How to remortgage if you’re self-employed

To give your remortgage application the best chance of success and ensure you find the right deal that fits with what you’re looking for, there’s a few steps we recommend you take…

Step 1. Look through your existing mortgage paperwork

The first thing you need to do is look through the documents for your current mortgage. Most importantly find out when your current deal expires, what interest rate you’re being charged and how much the monthly payments are.

Once you know when your existing deal finishes, give yourself anywhere between 2-3 months before this date so you have enough time to look at all the alternative deals available and prepare the proof of income you’ll need for your remortgage application.

Step 2. Speak to an experienced mortgage broker

A broker who’s experienced in dealing with remortgages will be able to find lenders who are currently offering the best deals to suit your requirements and look more favourably on applications from people who are self-employed.

They’ll also be able to help you decipher your existing paperwork so you can compare other deals with new lenders against what you currently have and prepare all the necessary evidence of earnings (see table below), should you decide to move your mortgage elsewhere.

We know the mortgage brokers we work with have a lot of experience in this area.

If you get in touch we can arrange for somebody to call you straight away.

Step 3. Find and compare the best deals

Each lender will have different offers available and they don’t all use the same eligibility criteria.

Your mortgage broker will know exactly where to look, who’s offering what, how this compares with your existing deal and which lenders will be more likely to accept your application.

This will save you a huge amount of time and, potentially, some money too as you can make sure you have a new mortgage deal all arranged for when your current deal ends.

Step 4. Check your credit score

Keeping an eye on your credit score is sound financial practice and something you can do on a habitual basis, not just when you’re thinking of applying to remortgage.

There’s a few websites that will let you do this without paying a fee (Clearscore and Experian, for example).

It’s important to have a good, solid credit score before submitting your application.

Step 5. Submit your application

Once you’ve done all your research, looked at all the different offers available and made your choice, you’re ready to apply.

The good news is your mortgage broker will be with you every step of the way and can help manage your application from start to finish.

Why should you consider refinancing?

A remortgage is where you switch your current mortgage to another.

You can either do this with your existing lender or if a more attractive deal is available with a different lender you can move to them. In a nutshell, it’s basically good financial management.

If you want to find out more about why remortgaging might be worth considering, take a look at our full guide to remortgaging here.

When is the best time to remortgage?

The best time is definitely when your current mortgage deal has expired. At this point, early redemption charges (ERCs) can no longer be applied so you’re free to switch with no fear of incurring large fees as a result.

ERCs usually range from between 1%-5% of your mortgage loan, so they can make quite a big impact on your decision to go ahead.

In some cases, it could still work out cheaper in the long run to change during the term of an existing deal, depending on what terms are available.

Also, if you’ve been able to pay off quite large amounts of your existing mortgage, this will leave you with a healthy amount of equity in your property.

This means when you’re looking to remortgage you’ll have a much lower loan-to-value (LTV), which should attract more lenders offering the most competitive rates.

But don’t worry, one of our expert brokers can help you to look at the figures to see if it is in your best interests to stay with your current provider or move to another.

Work out what your new deal could look like

You can use our calculator below to get a rough idea of what your new mortgage payments might look like after you’ve refinanced.

What if you became self-employed after taking out your mortgage?

When you apply for a remortgage, a lender still has to conduct an affordability assessment before they can approve your application.

If you were a salaried employee when you originally applied and you’ve since become self-employed – don’t panic! The only difference in the application process this time around is the proof of income you’ll be asked for.

If you’ve only recently started working for yourself, the table below provides a neat summary of how your earnings will be assessed and what evidence you’ll need to provide, depending on your self-employment status.

* = Future income projections may or may not be needed, but are a good idea to include particularly if you have less than two years full accounts available. 

What if you have no proof of income?

Then it will be difficult to remortgage but not impossible. In previous years, if you were self-employed you could use self-certification mortgages, which allowed you to confirm your own ability to pay but these types of loans are no longer available since major issues arose following the credit crunch.

There are still specialist lenders available who have experience in this area and can help in such circumstances.

Get matched with a remortgaging expert

We understand it isn’t just about finding a broker, it’s about finding the right broker with the experience and knowledge to help you get the best mortgage deal that suits your specific requirements.

Remortgaging if you’re self-employed can be quite complex. The brokers we work with will help make what can be a tricky process much more straightforward.

Call 0808 189 0463 or make an enquiry and we can arrange a free, no obligation call with a mortgage broker who has experience in assisting self-employed people remortgage today.