Remortgaging to Borrow More and Improve Your Finances

Remortgaging to borrow more can be a smart financial move for homeowners who need to access some extra cash. According to our research, up to 25% of a property's value can be borrowed through a remortgage.

This can be a more cost-effective option than taking out a personal loan, especially if you're looking to borrow a large amount. By remortgaging, you can tap into your home's equity and use the funds for a variety of purposes, such as paying off high-interest debt or financing a home improvement project.

The key is to understand the terms and conditions of your remortgage, including the interest rate and fees associated with it. For example, if you opt for a variable rate remortgage, you may be able to borrow more money, but you'll also be more vulnerable to interest rate changes.

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You might need to borrow more money for various reasons, such as paying for home improvements that can add value to your home.

Many people remortgage to pay for their children's education or to help a family member afford their first home. It can also be used to consolidate debts, as mortgage interest rates can be lower than typical loan interest rates.

You may need to borrow more money if you want to make some significant changes to your home. For example, if you want to add an extra room or convert your loft into a living space.

Some people use remortgaging to release equity in their home to pay for unexpected expenses, such as medical bills or car repairs. It can also be used to cover ongoing expenses, such as a wedding or a holiday.

You can use the money from a remortgage to do almost anything, as long as it's a legal purpose. This can include paying off debts, investing in a business, or even buying a second home.

Here are some common reasons people remortgage to borrow more money:

Note: These are just a few examples, and your specific reasons for remortgaging may vary. It's always a good idea to consult with a mortgage broker or financial advisor to determine the best course of action for your individual circumstances.

Before you decide to remortgage and borrow more, there are some key things to consider. Your equity amount is one of them - it's the value of your home minus how much of your mortgage you still owe. Your lender can tell you how much you'd have to pay to redeem your mortgage, including any Early Redemption Charges (ERCs).

You should also get a current valuation of your home to see if it has increased in value. Checking the Land Registry for similar property sales in your local area is a good idea to get an idea of your house's worth.

Assessing risk is crucial when considering a remortgage. Just because property prices have gone up in the past, it doesn't mean they will continue to do so. You need to think about the long-term mortgage affordability, including the overall increase in interest you'll pay over the entire mortgage term, as well as the larger monthly repayments.

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To help you visualize this, here are some key factors to consider:

Remember, timing is key when it comes to mortgage rates - they can change quickly, so stay up to date with the market and seek professional advice from a mortgage broker if you want greater certainty about your decision.

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Using your house as a deposit is a viable option if you've built up some equity. You can use this equity as a deposit to buy a new home, or even buy one outright if you have enough.

If your equity has increased, you can turn it into cash by selling your current home and using the funds as a deposit for a new one. This is a great way to put your money to work for you.

Downsizing to a lower value home can also be a smart move, as it can leave you with some equity to use as a deposit or turn into cash.

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Before you consider remortgaging, it's essential to weigh up the cost against the value of your equity. Your lender can tell you how much you'd have to pay to redeem your mortgage, including any Early Redemption Charges (ERCs) if your initial deal hasn't ended.

To determine your equity, work out the value of your home when you bought it minus how much of your mortgage you still owe. You can get an idea of your home's value by checking the Land Registry for similar property sales in your local area.

Assessing risk is crucial, as just because property prices have gone up in the past, it doesn't mean they will continue to do so. Be cautious and don't assume a further increase in property value will balance out the increase in borrowing.

When considering remortgaging, it's vital to think about your long-term mortgage affordability. This includes the overall increase in interest you'll pay over the entire mortgage term, as well as the larger monthly repayments. Don't forget to include any ERCs that apply if you're planning to leave your current deal early.

To stay on top of mortgage rates, keep an eye on the market and seek professional advice from a mortgage broker. They can help you find the best deal and ensure you're making an informed decision.

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To pay the administration fee, you'll need to choose from three options: online transfer, debit card by calling 0300 123 4123, or cheque.

The fee itself is £200, and it's required for remortgaging and repaying all or part of your equity loan.

You can pay the fee by online transfer, debit card, or cheque.

The fee is specifically for remortgaging, transferring equity, or making structural alterations.

Here are the payment options in a handy list:

After paying online, you must inform the Customer Service team on the number or email above so they can confirm it on your customer account.

To email the team, include your account number and a brief summary of your query, like 'Payment', in the subject line.

The payment must be received before your application can progress.

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You can consider three lender options when looking to remortgage and borrow more. Your existing lender may be able to offer a further advance on your existing mortgage, which can save you costs like early repayment charges and new product fees.

To compare remortgages and find the best deal for your circumstances, consider working with an expert broker who can help you navigate the process. They can also help you compare deals from different lenders.

Taking out a second charge mortgage is another option, but be aware that it's a separate loan that uses the equity in your home as security.

Comparing lender options can be a daunting task, but it's essential to get the best deal for your circumstances. An expert broker can help you navigate the process and find a suitable remortgage deal.

To start, consider your reasons for remortgaging. Are you looking to save money or borrow more? Whether your goal is to reduce your monthly payments or tap into your home's equity, comparing deals is key.

An expert broker can help you compare remortgage deals from various lenders, ensuring you get the best deal for your situation. They'll take the time to understand your needs and preferences, providing personalized recommendations.

Comparing deals with the help of an expert broker can save you time and money in the long run. By getting the best deal, you can avoid unnecessary fees and interest charges.

Ultimately, comparing lender options is a crucial step in finding the right remortgage deal for you. Take the time to research and compare deals, and don't be afraid to seek expert advice.

When you're considering remortgaging, it's essential to understand the charges involved. Your lender may charge you fees to remortgage and move to a different product or rate.

These fees can add up quickly, so it's crucial to ask for a breakdown of your lender's charges. Check that they are not more than £2000, as this is the maximum we permit.

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You can switch lenders, but it's not always a straightforward process. A product transfer is a way to switch to a new deal with the same lender without undergoing affordability or credit checks, but it won't allow you to borrow more.

You can use a product transfer to save money, even if you can't borrow more, by signing up for the new deal and scheduling the switch to happen at the end of your current mortgage. Some lenders may let you switch earlier without charging early repayment fees.

A good mortgage broker can help you decide whether a product transfer or remortgage is best for you, and put either one into effect. They can also help you compare deals from different lenders to find the best one for your circumstances.

You can only take out a second charge mortgage with a different lender to your main mortgage provider, and you'll need to prove you can afford the combined repayments. Your existing lender must also give permission for the second lender to offer you a loan.

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A further advance can be a great way to borrow more money from your existing lender, without having to go through the hassle of switching to a new lender. You can usually borrow at least £5,000 or £10,000, but the maximum amount will depend on your circumstances and the amount of equity you have built up in your home.

To be eligible for a further advance, you'll need a good mortgage repayment record and be up-to-date with your mortgage payments. You should also be at least six months into your current mortgage, have a loan-to-value of 80% or less, a good credit rating, and sufficient affordability for the increase in monthly repayments.

Contact your mortgage lender to ask about their further advance offers and what fees are involved. You'll also need to have your property professionally valued to determine the maximum amount you can borrow.

You can usually arrange for the further advance to have a similar repayment term to your main mortgage, but it's also possible to condense the extra borrowing into a shorter period, such as two or three years.

Here are the steps to apply for a further advance:

Before finalizing the agreement, be sure to compare the overall cost of the loan, including fees and interest charges over the entire term, with other options, such as remortgaging for a larger amount.

If you're considering a further advance, you should also be aware that your lender may impose a minimum further advance amount and that your interest rates may be affected by your loan-to-value ratio.

Here are some examples of lenders that offer further advances:

Keep in mind that you may have to pay an early repayment charge to your existing lender if you remortgage. It's always a good idea to consult with a mortgage broker to assess your options and determine the best course of action for your specific situation.

To remortgage and borrow more, you'll need to meet certain eligibility criteria. You must be a buy to let customer with The Mortgage Works, and have owned and let the property for at least 6 months.

To apply for a further advance, you'll need to provide your mortgage lender with some specific information. This includes your equity loan account number, the remortgage amount, your conveyancer's and mortgage broker's details, and a copy of your new mortgage offer.

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If you're applying for a further advance, you'll need to pass your lender's affordability checks. This means you'll need to demonstrate that you can afford the repayments on the additional loan.

You'll also need to meet certain conditions to be eligible for a further advance. These include not being in arrears during the last 12 months, and wanting to borrow at least £2,500.

Here are the eligibility conditions for a further advance:

To request a remortgage and borrow more, you'll need to provide your lender with some specific information. This includes how much you want to borrow, your conveyancer's details, and your loan to value limit.

Remortgaging to borrow more can have its downsides. You may end up paying more in interest over the life of the loan, which can be a significant cost.

One of the main disadvantages is that you'll be taking on more debt, which can increase your financial stress. This can be especially true if you're not careful about managing your finances.

To avoid this, it's essential to shop around for the best deal available. You can use a broker to help you find the most suitable option for your needs.

A mortgage can be a significant financial commitment, and it's essential to consider the potential downsides before making a decision. One of the main disadvantages of a mortgage is that affordability checks may be more stringent, and you'll have to explain why you want the money.

Higher initial fees are another con of a mortgage. These can include conveyancing charges, which can be a significant upfront cost. I've seen friends get caught out by these fees, so it's essential to factor them into your calculations.

Your monthly payments may also increase, which can put a strain on your finances. This is especially true if you're not careful about your borrowing amount and interest rates. Be sure to review your budget and consider the long-term implications of taking on a mortgage.

A mortgage can also put your home at risk if you're unable to make your monthly payments. This is a serious consideration, especially if you're not sure about your financial situation or have a history of missed payments. It's crucial to be honest with yourself about your financial capabilities before taking on a mortgage.

Here are some key cons of a mortgage to consider:

If you're in a negative position, it's essential to understand the implications. You cannot remortgage and borrow more money if your home's current value is less than the total of what you owe on your repayment mortgage and equity loan.

Your property valuation will show if you are in negative equity. This is a critical factor to consider before making any decisions about your mortgage.

You won't be able to release equity through remortgaging if you're in negative equity. This means you'll need to explore alternative options.

Consider the following:

If you're struggling to manage your finances, one way to get back on track is to create a budget that accounts for every single transaction.

Start by tracking your income and expenses over a month to get a clear picture of where your money is going. This will help you identify areas where you can cut back and allocate that money towards more important things.

Cutting back on unnecessary expenses like dining out or subscription services can free up a significant amount of money in your budget. According to the article, some people can save up to $500 per month by cutting back on these expenses.

Prioritize your debt, focusing on the accounts with the highest interest rates first. This will save you money in interest payments over time.

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A second charge mortgage is a separate loan that uses the equity in your home as security, allowing you to borrow money against your property.

You can only take out a second charge mortgage with a different lender to your main mortgage provider, so you'll have to prove to both that you can afford the combined repayments.

Your existing lender must give its permission for the second lender to offer you a loan, which can be a bit of a hurdle.

The good news is that a second charge mortgage can provide you with access to a significant amount of money, typically larger than what personal loans can offer.

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You can use this money for almost any legal purpose, which is a big plus.

Here are some key pros of second charge mortgages: