Will my husband, who has just become self-employed, cause us a headache by remortgaging? DAVID HOLLINGWORTH responds

Our mortgage deal ends in January 2025 and we will have around £50,000 left over an eight-year term.

Our current rate is 2.46 per cent and we are making overpayments of £180 each month, which should continue.

Currently, the mortgage is in joint names with my husband, who will become self-employed in April.

For remortgaging, you obviously won’t have two or three years of accounts and figures generally required as proof of income, although you will and will have a steady stream of income.

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I am employed and earn around £50,000 a year. My situation is unlikely to change as I have worked with the same employer for 27 years and will continue.

Will our current lender, Lloyds (and other providers), consider remortgaging my single income? Affordability shouldn’t be an issue.

Should we also consider adding it to the mortgage in name only or leaving it out entirely? We have a safety net of around £25,000 in savings, with a profit of 4.1 per cent. J.F.

David Hollingworth replies: A crucial part of the process for any lender is demonstrating that the mortgage will be affordable to borrowers.

This involves the mortgage lender assessing income and expenses to obtain a best estimate of available income for borrowers’ individual circumstances.

That process will require proof of income level, which is generally easy for those who work with a stable salary.

Even then, it may be necessary to demonstrate that any variable level of income will continue and that it has some history.

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Self-employed workers may have more variable income. This may be the result of seasonality in income levels or simply the ups and downs of business activity.

That means a lender can’t simply take a brief snapshot to establish the current likelihood of regular income.

Therefore, lenders look at the income history of self-employed people, typically over the course of two, but possibly up to three years.

Some lenders may be more flexible and may consider as little as one year and contractors may be treated differently.

However, unless there are other circumstances that could support a request, you are correct that your husband will not have built up sufficient history to be able to prove his income when his current arrangement ends.

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Affordability

The good news for you is that you should still have plenty of options open.

It should also not be necessary to leave your husband out of the application, which would also require removal of the property title.

In fact, some lenders will not even consider an application where a previous party on the mortgage has been removed but is still resident.

This is because of potential rights that could affect the lender’s security if they ever had to repossess the property.

Your income should be more than enough to meet lenders’ affordability requirements.

Although affordability is an individual assessment, the maximum multiple income limit is typically 4.5 times your annual income or more.

Since your income is on par with the mortgage amount, you should have no problem meeting the affordability requirements for a new lender.

In any case, your current lender will not require you to complete a new affordability assessment.

Assuming the switch is comparable and all payments are up to date, they should allow you to switch to a new deal.

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Look at the cost

However, it makes sense to get advice on the options available and a broker will be able to give you a broader view of the whole market compared to any offer from your lender.

With a relatively modest mortgage amount, it will be best to keep fees to a minimum.

Lenders often offer higher rates without any agreements or other incentives to reduce or eliminate the cost of remortgaging.

From a practical point of view, if you decide to change lenders, an advisor will also be able to help you with the application.

This will help ensure that you can declare your husband’s new self-employment status, but it will also tell him that you do not want to rely on his income, avoiding requests for proof that he will not yet have.

Although you might consider reducing your mortgage balance further, you should maintain an adequate cash fund in case of “rainy days.”

Of course, your next rate will be higher than the current offer, but if you can keep your overpayments high, it will help reduce your interest bill and pay off your mortgage sooner.