Question: I bought my house in 2015 at which point I was employed full time, as was my husband. I took out a three year fixed rate so will be looking to remortgage early in 2018. However, since buying the property I have left my full time role and I’m now self-employed. Will I have no choice but to stay on my lender’s SVR?
Paula Higgins (pictured), chief executive at Homeowners Alliance , answers:
On the whole self-employed borrowers are in a much better position now than they were a few years ago when it comes to accessing mortgage finance. Many lenders have become more open to the idea of lending to the self-employed.
You do not say when you became self-employed. If it was soon after you bought the home you will have more chance of securing a new mortgage. Some lenders such as Lloyds will accept a two-year record, and specialist lenders like Kensington and Precise Mortgages are prepared to take your first year’s earnings as your income. Those accounts would of course have to show you have a sustainable income level.
Your paperwork must be verified by a qualified accountant who will need to provide latest finalised accounts. The SA302 form, which declares income and profit to the taxman, will probably be needed, as lenders like to see exactly what is being declared. Lenders may also require Tax Year Overviews produced by an accountant.
I’d advise using a broker to help find the best deal. There are a number of lenders all with very different policies for the self-employed. A good broker will help you navigate the market more easily because they’ll already know what lenders are more likely to lend. If you would rather go direct to a bank or building society, make sure you get details of the deals but then shop around to see what else is on offer.
If you have only recently become self-employed so don’t have any accounts as yet a product switch might be more appropriate. This means you can get a new deal, on a like for like basis, without moving lender and you’d not normally be required to go through the same affordability checks as you would with a remortgage.
For more advice on getting a mortgage when you’re self-employed see the HomeOwners Alliance guide our latest free guide
As a company owner even by business bank doesn’t want to hear about self-employment to get a mortgage or a loan or overdraft while some of my employees could easily get a mortgage.
SA302 forms can no longer be requested from HMRC as from 4th September 2017. The only circumstance where someone can request a form SA302 is if they have submitted a paper tax return.
All mortgage companies were informed of this change well in advance. The mortgage companies were also advised that they should accept tax computations printed from accountants’ commercial software together with a tax year overview from the Government website.