Remortgaging and mortgage tips for the self-employed

When you’re self-employed there’s a tendency is to live by the phrase “if you want something doing properly, do it yourself”. Sometimes that’s a choice you make because you know that you can do it better than anyone else. Sometimes it’s because your finances don’t allow you to employ someone to do it for you.

However, there are undoubtedly times when you do look to someone else to help you out. Whether that’s using the services of an accountant to make sure you don’t pay too much tax or hiring someone to answer the phones or do the filing. You know sometimes you can save time by paying someone to help you, or you will save money by using the services of someone with specialist skills.

Why then do so many people fail to apply the same rules when they are looking for a new mortgage deal? Too many self-employed people waste their precious time and money searching for a mortgage deal, when they can often only see what’s available via high street lenders.

When you are self-employed, whether as a sole trader, freelancer or as limited company owner, your circumstances may mean that the best options won’t be on the high street. Whether that’s for a buy to let property, or to raise capital for other reasons, many people end up remortgaging themselves when they’d be better off asking a mortgage broker to find a deal for them.

We’ve talked to Simply Lending Solutions about why sole traders and property developers often initially opt for remortgages to raise finance and how a specialist broker can help.

Why Remortgage?

There are dozens of reasons why you might be looking for a new mortgage deal. These are some of the most common

1. To Raise Money For your Business or Property

If you’re thinking of expanding your business and need to raise some extra cash, releasing some of the equity in your home by remortgaging could be an option. Alternatively, using the extra money can be a good way to kick start property investment. Be aware however that not all lenders will allow you to remortgage for business purposes.

2. Your Introductory Deal is Ending

This is the most common reason for remortgaging. Most mortgages have an initial incentive offer – usually a lower interest rate. When this comes to end, you could find yourself paying significantly more for you mortgage. Most lenders will approach you toward the end of your deal period with a new offer, but it’s still worth looking around.

3. Searching for a Better Rate

It’s not just at the end of any introductory incentive period that you could find a better interest rate. Changes in the economy could mean that lenders cut interest rates and you could find a more favourable deal. Remember however, leaving an existing deal early may make you liable to penalty charges.

4. Looking for Flexibility

Flexibility in a mortgage can particularly handy if you’re self- employed; allowing you to overpay when things are going well, or take a payment holiday when you have other commitments. Remortgaging could help you to find a deal that better suits your financial situation.

5. Your Home is Worth More

If your home is worth more now than when you first got your mortgage – for example because you have carried out significant improvements – remortgaging could help you find a cheaper deal due to lower loan-to-value ratio. Often your current lender won’t take this into consideration, so remortgaging with a new lender may be your best bet.

6. Consolidating Debt

Whilst remortgaging can seem like an easy solution to consolidating any debt you may have – be it personal, business or property related – you shouldn’t take this step without exploring other option as you will usually be swapping unsecured debt for secured debt.

How Professional Mortgage Advice Can Make a Difference

Using a professional mortgage broker to find you a remortgage deal gives you the double whammy of saving you money and saving you time. A mortgage broker will do all the remortgaging legwork for you letting you get on with doing what you do best; running your own business.

• Finding the Right Lender

One of the biggest advantages a mortgage broker has over someone trying to find their own remortgage deal is their knowledge of the market. In particular specialist brokers will be up to date with the different criteria that lenders apply, for example whether they will lend to raise money for a business or whether they will consider retained profits when calculating your income. This allow them to ensure that they only submit your remortgage application to a lender who is likely to give you a deal.

• Finding the Right Deal

A good mortgage broker will work with you to fully understand your circumstances, including any conditions of your current mortgage deal. They then use this information to find the deal that is the best fit for you.

In addition, look for whole of market brokers, these will often have access to deals that you may not be able to find anywhere else. Plus they will have access to specialist lenders who will lend to those with less than two years accounts or even potentially bad credit.

• Saving You Time

It’s not just the fact that someone else is doing the work of looking for a remortgage deal that will save you time. Frequently applications are delayed because applicants have filled forms in incorrectly or failed to submit the correct documentation. A broker will ensure that all the I’s have been dotted and all the t’s crossed before they submit the final application, eliminating the likelihood that an application will be returned or declined because of an administrative error.

• Saving You Money

Using a broker can save you money in a variety of ways. Not only can they find you a cheaper deal, they also reduce the time you have to take away from your business to hunt down your own deal and complete paperwork.

Simply Lending Solutions will even promise that if they can’t find you a better deal than the remortgage offer made by your current lender, then they will still process the application for you but won’t charge you a penny. All-in-all making using a broker for your self-employed remortgage a no-brainer.

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