He explains: "They say a business owner should be commercially minded and set aside money for tax bills or reinvestment, asking why they are not funding these costs out of revenue or profits.
"But this is really short-sighted."
Moreover, while employed people can show a string of payslips to prove income, self-employed people often do not have consistent monthly income they can provide to lenders.
One month may be fat, another lean. This is why it is important for business owners to make sure they keep their accounts up to date and as thorough and detailed as possible. Even then, just a couple of years; worth of proof of income may not be enough.
John Phillips, group operations director for Spicer Haart and Just Mortgages, explains: "There are very few lenders who will lend to people with only one or two years of accounts. The majority of lenders want three years."
Proof of earnings
Typically, a self-employed person looking to remortgage should show at least two years' worth of company accounts, SA302s or tax returns - although as Mr Smith-Thompson warns, the stricter the lenders become, the more detailed and plentiful the documentation should be.
The SA302 is a form from HM Revenue & Customs which provides evidence of your client's earnings (‘SA302’) for the last four years, once they have submitted their self-assessment tax return.
Your clients can get a tax year overview for any year and this can provide evidence of income.
HM Revenue & Customs has also published a list of lenders who accept the SA302 form as proof of earnings, including Aldermore, Barclays, Leeds Building Society, Mortgages Plc, Santander and Virgin Money.
The current list (as at September 2016) does not have some household names on it, such as Metro Bank or Yorkshire Building Society, but this may be in the process of being updated.
What can brokers do?
Shopping around is important, looking beyond the traditional large lenders to see what smaller, more bespoke lenders, can offer.
Since the days of the old self-certification mortgages are long gone, it makes sense to examine all the fixed and variable rates that lenders- large and small - are offering.
There is always the possibility to explore options with the existing lender - sometimes the adviser who has a relationship with a lender can achieve more than if the client approaches the lender directly.
Work out the debt required compared with the equity in the property. It can be easier, says Jamie Smith Thompson, to get a remortgage for self-employed people if the loan-to-value is lower than 50 per cent or 60 per cent.
