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Re-mortgaging when being self employed and employed

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02-12-2016, 10:28   #1
monkeygirl
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Hi All

Looking for some advice from anyone who has experienced similar situations. I started my own business about three years ago. Being "sensible" I did so whilst still being employed. As the business has grown I have reduced the amount that I am employed and increased the amount of self employed income.

I am now in a situation where I want to borrow more on my mortgage for home improvements. However, after talking to several mortgage brokers and my current mortgage providor I'm told that mortgage advisors will only count my self employed income (which is more than the employed income) and do affordability based on that. They won't take into account my permanent employment which therefore makes it looks like I earn a lot less. I find this an incredible situation and wondered if anyone had experienced similar and had any advise? The last mortgage providor i approached said my best bet would be to wait to the end of next tax year when my self employed income will be higher still so I won't need to include the employed income. My other concern is that if I am sorting a remortgage out I would rather do it sooner rather than later and get a good interest rate before the rates start to go up.

Many thanks in advance
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02-12-2016, 11:24   #2
Bilge
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Talk to your bank as a first step and see what their policy is. You need 2 tax years' worth of self-employment before they will look at those figures, which it sounds like you've got. Then I would have thought any lender would look at what other income you have too.
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02-12-2016, 12:22   #3
Danny_Boy
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Quote:
Originally Posted by monkeygirl View Post
Hi All

Looking for some advice from anyone who has experienced similar situations. I started my own business about three years ago. Being "sensible" I did so whilst still being employed. As the business has grown I have reduced the amount that I am employed and increased the amount of self employed income.

I am now in a situation where I want to borrow more on my mortgage for home improvements. However, after talking to several mortgage brokers and my current mortgage providor I'm told that mortgage advisors will only count my self employed income (which is more than the employed income) and do affordability based on that. They won't take into account my permanent employment which therefore makes it looks like I earn a lot less. I find this an incredible situation and wondered if anyone had experienced similar and had any advise? The last mortgage providor i approached said my best bet would be to wait to the end of next tax year when my self employed income will be higher still so I won't need to include the employed income. My other concern is that if I am sorting a remortgage out I would rather do it sooner rather than later and get a good interest rate before the rates start to go up.

Many thanks in advance
Hi Monkeygirl, what brokers / lenders have you spoken too? I have been in the industry nearly ten years now and know of at least one High Street bank that will use 100% of both your employed and self employed income. Drop me a PM if you want to discuss further
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25-03-2017, 21:15   #4
Puggie
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Quote:
I'm told that mortgage advisors will only count my self employed income (which is more than the employed income) and do affordability based on that
Banks will normally want information on all taxable income, and most of their systems will allow for multiple income streams when calculating affordability.

As far as FCA/MMR rules are concerned, there is no discriminatory bias towards those who are employed over the self-employed. The onus placed on the lender is to verify your taxable income irrespective of whether that's through employment or self-employment.

Have you explored the possibility of a personal loan? Interest rates are at a historic low.
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27-03-2017, 10:02   #5
Chez2
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We have just changed our mortgage with Santander without a problem. They did want a run down of all our outgoings but that is pretty standard these days.

We aren't classed as self employed as we are owner directors of our own limited company rather than a sole trader or partnership. Our business has been running for just over eight years.
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19-04-2017, 11:01   #6
onlineo
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Talk directly to your current mortgage lender they may be able to put you on there cheapest tariff but failing this you there is no solution. The current mortgage rules are pretty broken for self employed.

Just before they changed the rules we switched up onto a lifetime tracker mortgage, thus we are able to not worry about re mortgaging. I wish we had gone for an offset life time tracker but they were unaffordable at the time. The mortgage will be paid off next year but I don't see how we will ever qualify for another one as our business profits varies a lot from year to year. So we will have to save up to get a larger house.
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