Perhaps your fixed rate is coming to an end and you’re now looking to remortgage before you drop onto the Standard Variable Rate (SVR), which could end up costing you more money. However, if since taking out your last mortgage, you’ve now become self-employed, there will be a few things you need to do differently this time round when it comes to remortgaging.
Remortgage when self-employed
Self-employment comes in all different forms. First and foremost, you might own your own company, or perhaps you have a large share in a company. Similarly, there are many professions whereby you might be classed as self-employed, such as musicians, photographers, freelancers, consultants, artists or dancers to name just a few.
If you fall within the self-employed category then you will need to be aware of a few things before you go ahead with your remortgage application. Mostly, everything is the same as when you remortgage as an employed person, however you just need to evidence things slightly differently so that lender’s can confidently carry out the affordability checks.
Preparation is key
Some lenders find it more difficult to assess people’s financial situation who are self-employed, which makes sense, as repayments are based on your salary, so if you’re not on a regular payroll, you can see why extra measures need to be taken. However, fear not, there are a few simple things you can do to make your remortgage as easy as possible.
1. Prove your income. This is the most important thing you need to make sure you do. You need to provide 3 years’ worth of financial records as this will help evidence your financial position. This might mean hiring a chartered accountant to bring your books up to speed, but you’ll thank yourself for it after.
2. Workflow. Being able to show that you have a healthy stream of work planned e.g. scheduled jobs that are coming up etc. will benefit you as this helps go someway to prove your future incomings.
3. Good credit score. Again, this is probably something you’ve heard before but it’s an important one. A good credit history will stand you in good stead when it comes to dealing with the lenders. If you can show you have a good credit score, as well as a healthy deposit and a well-recorded history of finances, you’ll be in a great position for remortgaging.