Remortgaging if you are self employed
With over 4.5 million people in the UK registered as self employed the last few years have been particularly tough for those looking to get a mortgage or remortgage based on their work status.
Getting a remortgage if you are self employed is harder than it used to be as UK lenders are more focussed on affordability than they were a few years ago.
In the time that you got your mortgage and now, if your working situation has changed due to self employment and your longer term income prospects are less settled, then remortgaging may not be as straightforward as you would like.
So what do you need to do to remortgage?
If you have just become self employed the bad news is that you will probably not be able to remortgage in the short term. If you are relying on a partner who has recently become self employed then that income will probably need to be discounted. So what criteria do you need to meet?
- Company Accounts - In most cases you will 2 years of signed off accounts by an independent accountant and for some lenders 3 years. Lenders will look at your profitability. Recent developments have seen some lenders prepared to accept 1 years signed off accounts - contact us for details.
- Annual Tax Return - Some lenders will accept 2-3 year tax returns as a substitute.
- SA302 - Most lenders will accept a Self Assessment form 302 - The SA302 is a response from HMRC which is only issued to those who file a paper tax return before 31 October following the end of the tax year. The form shows your income for the year.
For contractors as well as having two years of accounts or tax returns to prove income many lenders also require proof that the contract of employment has at least 6 months to go. Some lenders are now becoming more lenient and will accept previous employment history in the same field.
If you’re a contractor or freelancer lenders will typically want to assess your work experience, your previous history of contracting and the length of your current contract and the prospects of it being renewed.
In working out affordability and whether a lender is prepared to lend to you they will typically look at your day rate excluding VAT and will multiply it by five to give a weekly rate, and then multiply this weekly rate by between 46 to 48 weeks to allow for gaps in employment due to holiday etc. This will provide the lender with an annual income figure to assess affordability.
Our Remortgage Service - helping you make the right decision
Special features of what we offer include:
- Whole of market service - we work with most UK lenders
- Access to leading market mortgage rates for teh self employed
- Access to exclusive loan deals not available on high street
- Fast turnaround - speak to us today if you need to move quickly
- We have lenders who will take into account previous defaults and missed payments
- Looking to raise additional finance on top of your existing mortgage or buy to let mortgage? - we have access to a range of finance solutions
To discuss your self employed remortgage options call our remortgage team on 0117 313 7780 to complete our callback request form.