The Ultimate guide on how to remortgage to buy a second home.
There are a few different reasons you may wish to remortgage to buy another property. The main ones are because you need a second residential property for you or your family, or perhaps you want to become a Landlord by purchasing a buy to let property.
You should first consider your options, remortgaging your home in order to get the deposit for another property will usually increase your monthly payments.
Speak to your Bank or a Mortgage broker that can advise you on how much you can withdraw from your home to fund a second property.
Yes you can. And there are a few reasons why you may want to.
To become a Landlord
Raising funds from your current property in order to purchase a buy to let property is common practice. In fact it’s how most people get their first buy to let.
You may even then raise capital on existing buy to lets to get the next in your portfolio.
You would like a second home in a location to go on holiday in or when you just want to get away.
Wanting to get away is common. And having a second home you can go to when you need a break can be beneficial.
You might work in the city and want to get away from city life when not working.
You want a second home for a family member to live in.
Perhaps it’s for your children, or your parents. Maybe you want a home that your retired parents can stay in.
It is very common to remortgage buy to let property in order to raise capital to buy your next buy to let property, or make changes to your current property.
You should consider a few things before remortgaging your buy to let property.
Generally you would start by speaking to a Mortgage Broker. They will advise on the next steps. Once you have submitted your application for a remortgage both you and your property will be assessed. As long as the lender is happy that both you and the property meet their criteria and guidelines they will usually offer you a mortgage.
Unlike a buy to let, which would fund itself through rental payments. Buying a second residential property will be tighter affordability.
Not only are you needing to pay both mortgages, but there will be council tax on both properties, Utility bills, and maintenance costs. Lenders will likely assess all of the above to make sure you can afford both properties.
If you are currently in arrears you may find it harder to remortgage. It may be worth sticking with your current lender and getting everything back up together before approaching another lender to ask for more money.
Always speak to a qualified advisor though, you may still have options.
Yes, this is called a remortgage. It can be used to get a better rate. Or to raise funds if you want to make improvements on your property, pay off unsecured debt or perhaps buy a second property.
Generally it is probably easier to get a mortgage on a house you already own rather than a new home. This therefore means it can usually be done quicker.
If you own your home outright you may be unsure if you can get a mortgage on it. Thankfully, you can. It is quite common for someone to own a property outright and want to get a mortgage on it, here’s a few reasons we see often:
As you usually only need a small fraction of the total value of your home getting a mortgage on a house already paid for is usually quite simple and straightforward.
We’ve covered this a lot in this article. The answer is usually yes. It is commonplace to remortgage a property in order to buy a second property. Be that a rental property to make income or a second home for you or your family.
Whilst this will vary from lender to lender. Most lenders require the following:
If you would like to know more about any of these subjects get in touch with one of our team and we will give you a helping hand.