Year on year the number of people registering as self-employed continues to rise. There are now 4.8 million individuals were registered as self-employed – accounting for 15% of the entire UK work force. With many new businesses starting during lockdown, this number will only continue to grow.
In contrast to the many benefits that people find from being self-employed, one of the main stumbling blocks occurs when trying to obtain a competitive mortgage – and eventually, remortgage.
Though there may be a few complexities involved in first obtaining a mortgage if you are self-employed (or working as a contractor), many people have found that getting a remortgage can be even more challenging, as lenders continue to focus more and more on borrower affordability. With Brexit uncertainty still continuing to unsettle most corners of the financial services industry added into the mix, any changes in contractual terms and financial forecasts can make for a navigational minefield when your mortgage comes up for renewal.
Factors to take into consideration
In the vast majority of cases, lenders will generally require at least 2 years of income proof, either from accounts or from HMRC. This will provide them with an indication of the affordability of the products they can offer you. We have created our own guide on how to get these forms, which your adviser can pass onto you.
In addition to the above, if you are a contract worker the terms of your contract and work history will also be taken into account.
For who have recently become self-employed access to the above may not be possible, so when it comes time to remortgging there are added complications that many lenders tend to shy away from. The best approach in this situation is to make contact with us and we will be able to advise you dependant on your very individual circumstances, taking into account any unique personal scenarios; be they a second applicant, additional savings, property capital etc, as each situation and case is individual.
How much could you potentially borrow?
This will be based completely upon your individual circumstances – so therefore a definitive answer cannot be given. To find out how much your individual circumstances allow, give us a call and we can provide you with a more detailed answer.
Are there not as many options available for self-employed or contract workers?
Though self-employed and contractor mortgages are generally seen as a more niche area of the mortgage market, as well as the standard products advertised on the high street, we have access to a number of specialist lenders who specifically focus on products for self-employed individuals. As a brokerage with access to over 150 lenders we can source products from a greater range of lenders where many others cannot, even potentially your own bank and/or mortgage provider – we have access to many products not generally available to their regular customer base.
Unlike the majority of the mortgage and remortgage market for self-employed people, we source the best products suited to your individual circumstances completely fee free.
Get started today
If you are looking to remortgage, or indeed find your first mortgage as a self-employed worker or contractor? Call us today on 01249 474952 or complete the form below and we will be in touch.