Self-employed remortgages can present unique challenges, especially for those who are newly self-employed. While it is possible to secure a remortgage, lenders may scrutinize your financial situation more closely compared to traditionally employed individuals when assessing self-employed remortgages. By being well-prepared and understanding the specific requirements, you can simplify the process and potentially secure competitive mortgage rates that suit your needs.
This guide, presented by Contractor Mortgage Solutions, will help you understand how lenders assess self-employed remortgages and what you’ll need to present as part of your application.
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What Does It Mean to Remortgage or Refinance with Self-Employed Remortgages?
Self-employed remortgages or refinancing involves taking out a new mortgage on a property you already own. Homeowners choose to do this for various reasons, such as:
- Obtaining a better interest rate.
- Releasing equity for home improvements or consolidating debt.
- Adjusting the terms of their current mortgage.
When you remortgage, you effectively pay off your existing mortgage with a new one, either from the same or a different lender.
Refinancing can be particularly beneficial when interest rates are lower with other lenders or if you’d like to switch from a variable to a fixed-rate mortgage. It can also help you extend or shorten the term of your loan.
In essence, remortgaging provides an opportunity to better manage your finances by aligning your mortgage terms with your current financial goals and circumstances.
When Is the Right Time for Self-Employed Remortgages?
The ideal time to consider remortgaging is as you approach the end of your fixed-rate mortgage term. At this stage, you can secure a better deal before being automatically transferred onto your lender’s Standard Variable Rate (SVR), which often comes with higher interest rates.
Although you can remortgage at any time, doing so during a fixed-rate period may incur an early repayment charge. This fee compensates lenders for the interest they would have earned.
To maximize savings, review your current mortgage terms and compare them to market offerings as your fixed-rate term nears its end. Being proactive can help you save on interest payments and secure terms that suit your financial needs.
At Contractor Mortgage Solutions, our consultants will contact you well in advance to discuss your options and ensure you remain on the best possible terms.
Can You Secure a Self-Employed Remortgage?
Yes, self-employed individuals can remortgage, and many lenders now cater to self-employed applicants. Lenders often assess day rates and future earning potential when evaluating applications.
However, your application may depend on factors such as:
- Length of Self-Employment: Lenders typically prefer applicants with a stable track record of income. The longer you’ve been self-employed, the stronger your application.
- Income Stability: Lenders assess your ability to generate consistent income. If you’re newly self-employed, they may require more documentation or evidence of your earning potential.
Each lender has different criteria for evaluating self-employed applicants. Some may require a minimum number of years in business, while others might ask for detailed financial records or specific documentation.
By keeping detailed records of your income and expenses, maintaining a healthy credit score, and working with a specialist broker, you can enhance your chances of securing a favorable self-employed remortgage deal.
Tips for Successfully Securing a Self-Employed Remortgage
- Maintain a Strong Credit Score: Timely debt payments and low credit utilization signal financial reliability to lenders.
- Organize Financial Documents: Keep your tax returns, bank statements, and profit-and-loss statements up-to-date and accessible.
- Demonstrate Consistent Income: Show a stable work history and reliable earnings through detailed records.
- Work with a Specialist Broker: At Contractor Mortgage Solutions, we understand the complexities of self-employed remortgages and can connect you with lenders who offer competitive terms.
- Plan Ahead: Compare interest rates and terms from multiple lenders to find the best deal for your situation.
Why Choose Contractor Mortgage Solutions?
At Contractor Mortgage Solutions, we specialize in helping self-employed professionals navigate the complexities of remortgaging. Here’s how we can assist you:
- Tailored Advice: Our consultants understand the challenges self-employed individuals face and provide personalized guidance.
- Extensive Network: We work with lenders who accommodate self-employed income structures, ensuring you access the most competitive terms.
- Comprehensive Support: From documentation to lender negotiations, we’re with you every step of the way.
Ready to Explore Your Remortgage Options?
Whether you’re newly self-employed or a seasoned professional, remortgaging as a self-employed individual doesn’t have to be complicated. With the right guidance and preparation, you can secure a mortgage that aligns with your goals.
Contact Contractor Mortgage Solutions today to discuss your options and make the most of your financial opportunities. Our team is here to help you every step of the way!