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How Remortgaging Can Help You Buy Another Property

Do you have a comfortable home and are you paying the mortgage down enough these days that you feel you are at the end of the tunnel? If this sounds familiar, you might be considering your next move. 

Does the prospect of owning a second home appeal to you? Or maybe buying a vacation home? Or even making a good investment by buying a rental property? If this sounds tempting, now could be the perfect time to explore those options and see if any of those dreams can come true. 

1) Equity

When you have equity in your home, you can use it to buy something new. When you remortgage your house, you can ask the lender to lend you part of the money that you already have on the property.

If you can show you have equity, then the mortgage lender is likely to write you a new mortgage. They’re going to want to see what you propose to do with the money. You’re going to need to put together a plan, and then they are going to have to approve it.

2) Self-Employment

Self-employment can be a great way to earn money and start building your own wealth. However, it’s important to recognise your obligations. Even if you are self-employed, it is still possible that you could be forced to pay a shortfall in the mortgage payments if you are unable to make them. It is still the responsibility of the lender to ensure the mortgage is paid.

However, self-employment itself can be a worthwhile asset. As long as you can show that you have a good income, it can be a way to get that mortgage debt off your back.

As long as you can continue to show that you can make the payments, then you are much less likely to lose your home. This can be particularly useful if you have been unfortunate enough to have a short-term loss of income. Rather than the lender repossessing your home, it can be a good idea to remortgage it.

3) Affordability

If you’ve got a mortgage, your credit score can be a great asset. When you have a good score, you’re more likely to get a good interest rate on your mortgage. If the interest rates drop, then you can lock them in before they go up again.

However, if you have a bad score you might not be able to secure a good interest rate. It can be a good idea to improve the score, and you can do that by paying the mortgage down. It can also be a good idea to get a new mortgage with a better rate.

How Remortgaging Works

When you remortgage, you will be able to use the money from the mortgage to help with the purchase of your next home. You will be able to use a new mortgage to secure the purchase of your new property.

In most cases, you will need to complete a new mortgage application form. Since you will be borrowing against your existing property, the lender will want to know what you intend to pay off with the new mortgage. They will need to know that the amount you are borrowing is affordable based on what you already have on the property.

Conclusion

When you have equity and you are able to take advantage of a good interest rate, then remortgaging your home can be a useful way to buy something new. Do note that this article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.

If you want to get started on your way to your dream home, A Move Brokers can help you get there. We are the best mortgage brokers in the business, offering consultancy from experts to help you find your new home. Get in touch with us today to learn more.

This article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.