Remortgaging If You’re Self Employed Or A Contract Worker

09-November-2022 17:04
in Private clients
by Sam Hodgson
Mortgages for self employed

If you are self-employed or a contract worker, you may be wondering whether you can remortgage a property. The answer is yes, your self-employed status should not be a barrier to remortgaging. 

However, obtaining a remortgage as a self-employed individual or contractor can be a more complicated process. The following five tips will help you secure the best remortgage deal for your financial situation.

Get your paperwork in order

You need to ensure that you have registered with HMRC if you are self-employed, as this provides you with your Unique Taxpayer Reference (UTR). This provides further evidence to lenders as it verifies your work status.

Should you apply for a remortgage as a contractor, a lender will request recent payslips and the details of your contract. This is particularly important if you are working a short-term contract (less than 12 months).


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Provide proof of future income

Whether you are self-employed or a contract worker, the lender will ask for evidence of any impending income or contracts that you have lined up for the future. This is because the lender wants to ensure that your contract or self-employed business is stable and predictable enough to sustain the monthly repayment plan of a long term remortgage.

The more stable your income, the better chance you have of finding a lender and securing the best remortgage deal possible. Your lender will be more confident in drafting a remortgage deal if your income is:

  • Steady, regular and predictable
  • High enough to pay monthly repayments
  • Extensive enough to prove that your client base has longevity

Work on your credit score

Before you apply for a remortgage as a self-employed or contract worker, make sure that you have a decent credit score. It can take some time to tidy up your credit score, so we recommend working on it for three to six months before you remortgage your property.

A good credit score proves that you can manage your money carefully and effectively. It also demonstrates sound foresight when borrowing money, and you can make your repayments on time.

Lower your LTV

The loan-to-value (LTV) of your property is calculated by dividing the size of your mortgage by how much the property is worth on the market. Your LTV is dependent on the initial deposit you put down and the equity you own in the property. If your property has risen in value, you may be able to move to a lower LTV band.

This can be very beneficial if you are remortgaging as a self-employed worker who does not yet have evidence of three years of accounts. If you can secure a low LTV, it helps a lender to see that you are not a risk. This is because you will be borrowing less from the lender, meaning that you will likely be able to afford your repayments.

Use a specialist mortgage advisor

If you are wondering how to remortgage if you are self-employed or a contract worker, we would recommend shopping around for different deals before settling on one. Transferring to a new mortgage is a decision which should not be taken lightly, so take your time - and always read the fine print.

At Clifton Private Finance, our specialist mortgage advisors provide a highly professional service to guide you through the remortgaging process, offer expert advice and put you in touch with the best lender for you. Whether you are a UK national, ex-pat or foreign national, our professional team can source remortgages for residential and buy to let properties across the UK.

Book a free and no-obligation telephone consultation at a time that suits you:

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Or call us on 0117 959 5094