Remortgage as director without accounts

DomDeDom

Hi, It is time to remortgage my house. I owe 80k and it is worth 120k+ (67% LTV). I wish to reduce the period and increase the payments but I am worried about contacting the bank...

I taught until Aug 2017 and received 26k PA (10k in 2017 financial year) which was sufficient for my bank to approve my mortgage. In August 2017, I co-formed a LTD and have 60% shareholding. I paid myself 18k dividends prior to April 2018 but will a bank see this change of circumstance negatively.

I have 10k savings as an insurance should the business dry up.

My questions:
Would any mortgage lender have issue with the short term proof of my new income?

Would my current lender ask for additional proof should I change the period and remortgage with them (only £20 a month more than the cheapest) ?

Would I have built up any trust with banks with 10k savings, equity, no debts (other than student loan and mortgage), 4 years of previous payments etc.?

I know I can cover the payments of a 600 per month 12 year mortgage but if I have to prove my income and can't, will my current provider also not allow me to move off the follow on rate that starts on June 6th?

All and any help is appreciated.

kingstreet

Approach your existing lender (online?) for a customer retention product as you won't be able to remortgage without evidence of at least one year's self-employed income.

Keep the term the same to avoid affordability and status checks and make voluntary overpayments within any permitted limit to reduce the term that way.

ACG

The change of business structure should not be a deal breaker (I moved house after changing from sole trader to limited) but chances are it is going to cost you more and/or be a PITA to switch lenders.

I would probably look at what Kingstreet has suggested.

DomDeDom

Thanks for your responses.
It's a shame that I cannot take advantage of my improved circumstance and the extremely low rates of borrowing. My final question is for forward planning:
How many years should I lock in?
My business began 27th July 17 and the mortgage renews on the 6th June 18 (I may always be less than a full year for renewal) so should I lock in for one year and improve my deal afterwards or will it require longer for the bank to appreciate this as secure income?
Annoyingly: 21yrs - £380pm - my current term
18yrs - £433pm
15yrs - £508pm
12yrs - £620pm - my preferred term
I'm only 29 but it would have been nice to reduce the term to a little over a decade. If my parents were to be guarantors, or by any other means, is there a way to secure the 12yr mortgage?

Thanks again for all of your help,

ACG

Will your current lender not allow you to tie in to a new deal and overpay?

DomDeDom

I believe so.
Currently with Santander so I assume that applying without changing terms online will be possible.
I think they allow 10% overpayment also. If this is the way to go, I will save money in a high interest account throughout the year and judge the situation at the end of the initial period.
I hear TSB have such a current account coming up :rotfl:

kingstreet

It's 10% of the outstanding balance each year, so in year one you can overpay £8k, or about £650 a month without penalty. This is more than the difference between the two different terms you quoted earlier so reducing the term shouldn't be difficult simply by overpaying what you can.