Going self employed .. will we have problems when remortgaging?

[ducdo]

We are in the process on buying a house and taken a 3 yr fixed mortgage rate.

DH has been offered good opportunity to join an established business partnering a friend. He would be self employed so set himself up as limited company but we wonder how this might affect our financial situation when we come to remortgage in 3 years time.

Do you have to show X number of years/months accounts to show how much he's earning? Would we be offered less based on fact he's self employed rather than employed on fixed salary?

Reason I'm asking is as my Mum has helped us out with a loan to buy the house and we have to repay her in 5 yrs time. This work opportunity has now come along and we're wondering if we may struggle to borrow the additional amount to repay her in 5 yrs time, if DH has changed from 'employed' to 'self employed'.

Any advice much appreciated. Thank you!

If you declare him to be self employed then the mortgage people will want to base the repayments on your salary. It may be better even if he's considered the dependent (stay at home dad). That's what's happened to our new mortgage (just bought new house). Dh is self employed now and the original bank was really nasty about it (even though we could afford the repayments etc). Finally got it from Halifax with little problem. Good luck.

This is a situation where it can be worth using an independent mortgage broker. There are mortgage companies who specialise in lending to people who are self-employed. Alternatively, when your fixed rate period expires, you may find your existing lender is happy to carry on the relationship and move you onto either the standard variable rate or a new fixed rate deal without demanding to see proof of earnings all over again.

great thanks both

You already have your mortgage in place and it will say on there what happens at the end of your FR period - usually goes straight onto SVR and yes, re-fixing is easy.

However, your issue is raising more money to repay your Mum.

It's going to depend largely on how much money you are talking about, but you have options. Is there anyway you could afford to pay your Mum back over the five years rather than wait until then to do so?

But to answer your actual question, yes, it will make a big difference that DH is self employed :(

As a self employed person I have always had to provide three years of account produced accounts to mortgage companies. Certain mortgage providers do not like self employed people, also what sector you are in can affect you much more if you are self employed.
I have got mortgages with Co-op, santander and RBS as a self employed person, but all have had to go through the central lending team rather than at branch level and this always takes longer.