A self-employed remortgage can be a great way to save money on your monthly mortgage payments. It's also a cheap source of funds for home improvements, consolidating debts, and many other uses.
This comprehensive guide aims to provide answers to your most common questions about self-employed remortgages, so you can weigh up the pros and cons of getting a new mortgage deal, and make an informed decision.
- Self employed remortgages: the basics
- The pros and cons of product transfers
- Are there any pitfalls to be aware of when remortgaging?
- Fixed vs variable rates
- How much can I borrow?
- What's the maximum LTV for a remortgage?
- What can I use additional borrowing for?
- Can I get a remortgage with bad credit?
- Getting a remortgage quote
Self-employed remortgages: the basics
A remortgage is simply a mortgage taken out with a new lender to pay off (a.k.a. redeem) your current mortgage deal.
To remortgage you must have sufficient equity: the percentage of the property that you own outright. At least 10 percent is required, sometimes more depending on your personal circumstances.
For example, if your home is worth £300,000 and your current mortgage balance is £240,000, your equity in the property is 20 percent.
It's prudent to ask your mortgage broker to source a new mortgage deal well in advance of your current deal coming to an end.
This prevents you inadvertently moving onto the lender's Standard Variable Rate (SVR), which is typically much more expensive.
The other option for a self-employed person is to take out a product transfer, which is simply a new mortgage deal with your existing lender.