Remortgage and Home Improvement Funding
The latest industry news and guides from Active Mortgages.
The latest industry news and guides from Active Mortgages.
A married couple approached us for advice as they neared the end of their existing mortgage deal. Both clients were self-employed and operated multiple income streams, including a limited company and a separate growing business venture. They had two young children and owned a family home valued at approximately £390,000.
Their outstanding mortgage balance was around £128,000, and they were keen to explore the possibility of raising additional funds to finance a planned home extension and renovation project.
The clients wanted to increase their borrowing to approximately £158,000, releasing around £30,000 for home improvements while securing a competitive remortgage deal.
As self-employed applicants with income derived from a combination of salary, dividends and business profits, affordability assessment was more complex than a standard employed application. In addition, one of the businesses had only recently completed its second year of trading, meaning lender criteria would play a significant role in determining available options.
The clients also had existing unsecured borrowing, including an interest-free credit card balance and a small personal loan, both of which needed to be factored into affordability calculations.
We carried out a detailed review of the clients’ financial position, including their business accounts, personal income, existing commitments and future objectives.
Working closely with their accountant, we assessed how different income structures could be presented to lenders and identified the level of income required to support the borrowing requested.
Following our research, we shortlisted lenders with favourable criteria for self-employed applicants and those willing to consider multiple income streams. We also modelled several mortgage term options, allowing the clients to compare monthly payments against the overall cost of borrowing.
Alongside the mortgage advice, we arranged a separate financial resilience review to ensure the family had appropriate protection in place should illness, injury or loss of income affect their ability to meet future mortgage payments.
The clients were able to proceed with a remortgage solution that met their objectives, securing funding for both their existing mortgage balance and planned home improvements.
By carefully matching the case to suitable lenders and presenting the income correctly, we were able to provide clarity on affordability and help the clients move forward with confidence.
The new arrangement gave them the funds required to improve their home while maintaining manageable monthly payments and supporting their long-term financial goals.
This case highlights the importance of specialist advice for self-employed clients whose income does not fit a traditional lending profile.
Rather than relying on a simple salary figure, we considered the clients’ wider business circumstances, future growth potential and multiple income sources. By working collaboratively with their accountant and taking a holistic view of their finances, we were able to identify a route forward that balanced affordability, flexibility and future planning.
For business owners and self-employed professionals, the right advice can often make the difference between a limited range of options and a tailored solution that fully supports their ambitions.
Book a call with one of our team to talk about your requirements.
