If your fixed rate mortgage is coming to an end, now is a good time to review your options. Taking action before your current deal expires could help you avoid moving onto your lender’s standard variable rate and potentially save money on your monthly repayments.
At Jones & Young, we help self employed individuals understand their remortgage options. While lenders may assess your income differently, many offer mortgage deals for self employed applicants who meet their lending criteria.
In this guide, we explain how a self employed remortgage works, what lenders look for during the mortgage application process and what steps you can take to improve your chances of securing a better deal.
What Is a Self Employed Remortgage?
A self employed remortgage involves replacing your current mortgage with a new deal, either with your existing lender or a different lender. Many self employed individuals choose to remortgage when their fixed rate period is coming to an end, although it can also be an option if they’re looking to borrow more or release equity from their property.
One of the main reasons to remortgage is to avoid moving onto your lender’s standard variable rate. This rate is often higher than a fixed rate mortgage, which could increase your monthly repayments. Reviewing your options before your current mortgage deal ends gives you more time to compare mortgage deals and decide whether staying with your current lender or switching to a new lender is the right choice.
Every remortgage is different, and the most suitable option will depend on your circumstances, financial goals and the products available when you apply. Planning ahead can help you make a more informed decision and avoid unnecessary pressure as your current deal comes to an end.
Can You Remortgage if You’re Self Employed?
Yes, you can remortgage if you’re self employed. Whether you’re a sole trader, run a limited company or have recently become self employed, many mortgage lenders are willing to consider your application. The key is showing that you can comfortably afford the mortgage and meet the lender’s criteria.
Every lender assesses self employed applicants differently. Some may place more emphasis on your income history, while others will look at factors such as your credit history, proof of income and overall financial position. If you’re newly self employed, your options may be more limited, but that doesn’t necessarily mean you won’t be able to secure a new deal.
When assessing your mortgage application, lenders may consider:
- Your income and how it’s evidenced.
- Your credit history and credit score.
- Your current mortgage and payment history.
- Your deposit and loan to value.
- Your proof of income, such as tax returns or other supporting documents.
Because lender criteria vary, it’s worth speaking to a specialist broker who understands self employed mortgages. They can help you compare mortgage deals, explain your options and identify lenders that are experienced in assessing self employed borrowers.
How Does the Remortgage Process Work?
The remortgage process is similar whether you’re employed or self employed, although the information you’ll need to provide may differ. Starting early gives you more time to compare mortgage deals, prepare your documents and avoid unnecessary pressure if your current deal is coming to an end.
Review Your Current Deal
Before making any decisions, check when your fixed rate period ends and whether an early repayment charge applies. If you do nothing, your mortgage will usually move onto your lender’s standard variable rate, which could mean higher monthly repayments.
Compare Your Options
Once you know when your current deal ends, you can compare the options available. This may involve choosing a new deal with your current lender or switching to a new lender if they offer a more suitable mortgage rate. Comparing products early gives you more time to consider the costs, interest rate and overall value of each option.
Submit Your Mortgage Application
Once you’ve chosen a mortgage, you’ll complete the mortgage application process and provide any documents requested by the lender. This may include proof of income, tax returns and other financial information. The lender will then complete its underwriting process before confirming whether your application has been approved.
What Documents Will Lenders Usually Ask For?
When you apply for a self employed remortgage, lenders will usually ask for documents that help verify your identity, income and financial circumstances. The exact requirements vary, so don’t worry if one lender asks for something another doesn’t.
You may be asked to provide:
- SA302 forms.
- Tax year overviews.
- Tax returns.
- Recent bank statements.
- Proof of income.
- Your driving licence or another form of photo ID.
- A recent council tax bill to confirm your address.
- Signed contracts where relevant.
Depending on your circumstances, lenders may also ask for additional information to support your mortgage application. For example, sole traders, limited company directors and newly self employed applicants may be asked for different evidence depending on how their income is assessed.
Preparing these documents in advance can help the mortgage application process run more smoothly and reduce delays while your application is being reviewed. If you’re unsure what’s needed, a specialist broker can explain the lender’s requirements before you apply, helping you feel more confident throughout the remortgage process.
How Can You Improve Your Chances of Getting a Better Deal?
While no mortgage is guaranteed, taking a few simple steps before applying could improve your chances of securing a competitive deal.
Check Your Credit Score
Before submitting your mortgage application, review your credit report and credit score. Checking for errors and making sure your information is up to date can help you understand how lenders may assess your application.
Reduce Your Loan to Value
If possible, lowering your loan to value ratio may give you access to a wider range of mortgage deals. This could help you secure a lower interest rate and potentially save money over the term of your mortgage.
Plan Ahead
It’s often worth starting the remortgage process several months before your current deal ends. This gives you more time to compare lenders, gather the documents you’ll need and consider your options before moving onto your lender’s standard variable rate.
Speak to a Specialist Mortgage Broker
A specialist broker can compare products from different lenders and explain which options may suit your circumstances. They can also guide you through the mortgage application process and help you understand how different lenders assess self employed applicants, giving you more confidence when applying for a new deal.
Jones & Young: Mortgage Advice for Self Employed Borrowers
At Jones & Young, we understand that no two self employed applicants are the same. Whether you’re a sole trader, a limited company director or newly self employed, we’ll take the time to understand your circumstances and explain the mortgage options available to you.
Our experienced advisers work with a wide range of lenders and can help you compare suitable mortgage deals based on your income, financial situation and future plans. If you’re approaching the end of your current mortgage deal, get in touch with our team for straightforward, professional advice.
Self Employed Remortgage FAQs
If you still have questions about applying for a self employed remortgage, the FAQs below cover some of the topics we’re most commonly asked.
Can I remortgage if I've been self employed for less than a year?
Yes, it’s possible, although your options may be more limited. Some mortgage lenders prefer applicants with a longer trading history, while others may consider newly self employed individuals depending on their circumstances, income and supporting evidence. Speaking to a specialist broker can help you identify lenders that may be willing to consider your application.
Can I remortgage with my existing lender?
Yes. Many people choose to stay with their existing lender by taking out a new deal rather than switching providers. However, it’s still worth comparing mortgage deals from other lenders to see whether there’s a more suitable option available.
Do I need two years of tax returns?
Not always. Many lenders ask for tax returns, SA302 forms or tax year overviews as part of the mortgage application process, but the exact requirements vary. Some lenders may accept different forms of proof of income depending on your circumstances.
Will being self employed affect my interest rate?
Not necessarily. Your interest rate will depend on several factors, including your credit history, loan to value, income and the mortgage product you choose. Being self employed doesn’t automatically mean you’ll receive a higher rate.
Can I remortgage to release equity?
Yes, if you have sufficient equity in your property, you may be able to remortgage to release some of it. People often do this to fund home improvements, consolidate borrowing or pay for other major expenses, although it’s important to consider the long-term cost of increasing your borrowing.
Should I use a mortgage broker?
A mortgage broker can help you compare products from a range of lenders, explain the remortgage process and identify options that suit your circumstances. This can be particularly helpful if you’re self employed or your income is more complex than a standard salaried applicant.
