If you are self-employed and approaching the end of a mortgage deal, it helps to understand what is happening in the wider market. Over the past two years, many borrowers chose two-year fixed-rate mortgages at a time when interest rates were unusually high. With those deals now ending, many people are finding that today’s mortgage offers are more competitive than the ones they fixed into.
However, the outlook is not straightforward. Inflation has begun to creep back up, and while the Bank of England has started to cut interest rates, it is uncertain how quickly or how far those cuts will go. This creates a challenging environment for anyone thinking about their next mortgage.
IPSE's research has previously revealed that 16 per cent of freelancers plan to remortgage each year, with over half reporting that they intend to do so to find a better rate (52%) or due to their current deal shortly expiring (51%).
Interestingly, one in five (21%) also remortgage to borrow more for home improvements.
We know that three-fifths of self-employed people face more hurdles than employees when applying for a mortgage and over half believe lenders don’t understand their financial situation.
In particular, lenders may look at:
Understanding how lenders assess your circumstances is therefore key to securing the most suitable mortgage.
You do not have to wait until your current deal ends to act. Most lenders will allow you to secure a new mortgage up to six months in advance. This has two benefits:
This means you can approach your renewal with more certainty and flexibility.
If your mortgage deal is due to end soon, or even within the next six months, now is the time to start exploring your options. Taking advice early could give you more control and peace of mind.
Finding a lender that understands and knows how to assess the self-employed is an important first step and as as independent financial provider, Chase De Vere can search the whole market to find a suitable lender that will take a fair view of you income and accounts.
Your home may be repossessed if you do not keep up repayments on your mortgage. The information in this article is provided for guidance only and does not constitute financial advice.
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