Self-Employed Remortgage: How to Remortgage When Self-Employed or on Part-Time Hours
Wondering if you can get a remortgage when self-employed or on part time hours? Read this self-employed remortgage guide to learn what information you need to give to your lender and how it works.
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If you’ve recently become self-employed or your hours have reduced, you might be nervous about getting a remortgage.
It’s important to assess your financial commitments regularly, and you shouldn’t let being self-employed or having part-time hours impact that process.
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Can I Get a Remortgage When Self-Employed?
Remortgaging when self-employed is absolutely possible and quite straight forward.
The main difference with remortgaging now you’re self-employed, compared to when you were employed, is that you’ll need to give additional information to prove your income and demonstrate that you can afford the monthly payments. Other than that, you’ll have access to the same remortgage deals as employed individuals.
Lending money is always concerned with risk, and being employed doesn’t necessarily make a person more or less of a risk. Risk is assessed based on many factors, and income is just one of those factors. For example, a self employed person who can afford the payments and has a spotless credit history is less risky than an employed person with a low credit score. Unfortunately, you’ll need to provide more evidence of income than an employed person.
Remortgaging now as a self-employed individual, you’ll need:
- 2 – 3 years’ certified accounts (this can vary between banks)
- SA302 forms or a tax overview from HMRC
- Proof of new contracts yet to commence
- Proof of any dividend payments if you’re a company director
It’s common for lenders to favour accounts prepared by an accountant, so it’s worth investing in one before you apply for your remortgage.
If you have less than one year of accounts, you might struggle to prove your average income level, but a remortgage adviser might be able to find a company who’ll consider your application.
Is It Hard to Get a Self-Employed Remortgage?
No, it’s not harder to get a remortgage when self-employed compared to employed, but you will be required to provide a little more information to prove your income. Evidence of your income is one of the ways that a remortgage lender assesses whether you can afford the monthly repayments.
Is It Easier to Get a Self-Employed Remortgage with the Same Lender?
It can be easier to stay with the same lender, regardless of whether you’re self-employed or employed, but it might not be beneficial over time. You wouldn’t remortgage with the same lender; you’d likely get a product transfer – or a further advance if you wanted to borrow more money.
Choosing whether to stay with an existing lender can be a difficult decision, especially when faced with competitive remortgage deals from other lenders.
Like all choices, there are pros and cons, and your personal circumstances need to be considered. Your existing lender will already have a relationship with you, so they may be able to see that you’ve never missed a payment. They’re also more likely to accept fewer years of accounts than a different lender, who’s assessing you as a risk for the first time.
However, staying with your existing lender may be less competitive as an existing customer, which could make switching to a new remortgage deal an attractive option. On the other hand, your existing lender might incentivise your loyalty by reducing or eliminating some of the fees for transferring you to a new product.
A remortgage adviser can walk you through all of the pros and cons, helping you understand your options and ensuring you make an informed decision.
Can I Get a Remortgage on Part-Time Hours?
If you’re on part time hours, as with all remortgages, your ability to obtain a remortgage will be based on whether you can afford the repayments. If you’re struggling to pay your current mortgage, then it might be a good time to discuss this with a remortgage adviser, as you still have a number of options.
Some of those options include extending the mortgage term, for instance, from 10 to 20 years. Your adviser will explain that this might reduce your monthly repayments, which can increase your chances of a successful application. However, increasing your term will mean that you pay more interest (cost borrowing) as you’re taking longer to pay the money back.
Can I Get a Remortgage with 2 Jobs?
Yes, whether you have 2 jobs or 4, it doesn’t matter when it comes to remortgaging.
The company lending you the money cares about the length of time you’ve worked with a company and what your total income is on a regular basis.
The “regular” part is important because it gives the lender an idea of your average monthly income, and after allowing for other bills, what you can afford to pay each month on a mortgage. You’ll need to prove all the income you’ve generated, which means submitting payslips and your bank statements.
Can I Get a Remortgage for Self-Employed and Employed?
Yes, you can remortgage if you’re both self-employed and employed. As with any self-employed application, you’ll need to show that you’re registered with HMRC (unless your income is under their threshold for self-employment) and provide evidence of your income.
The sticking point with being both employed and self-employed is that you’ll need to provide 2 – 3 years of evidence of self-employment income and potentially only 3 months for your employed work. The good news is that you can also provide evidence of future contracts for your business that haven’t started yet, which will help you obtain a mortgage.
Are Remortgage Self-Employed Deals More Expensive?
No, self-employed remortgages aren’t necessarily more expensive than any other type of mortgage. A remortgage is based on risk, and risk is determined by a number of different factors – such as your credit score, how much of your house you own and how much you earn each month.
If you need further information on self-employed remortgages, or to speak to one of our expert remortgage advisers, give us a call on 0808 239 9021 or enquire online.
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