A Guide on Remortgaging to buy another property
For those of you who are asking whether you can remortgage your home in order to buy another property, you can! Read on to find out more!
If you’ve not thought about it before, remortgaging your home can be a great way of releasing thousands of pounds built up in equity that can then be invested. You may see it as a way of funding your move to a new property, retaining your current home for rental or you may wish to use the funds to purchase a property to rent. Over this article we’re going to show you how remortgaging can be a great move for you to get a new mortgage on another property. Let’s get started!
What will I need to do?
So, you’ve got your heart set on getting a new property to either live in or to rent out. But how are you going to get started? The first big thing you’re going to have to think about is how much equity you currently have in your home. By equity, we mean the total value of your property minus the amount of mortgage that you are yet to repay. The great thing about remortgaging is that it will allow you to access some of the equity that you have in the property.
The magic number is 25%. If you are thinking that you may be able to retain your current property & release sufficient equity to purchase a new family home then this is known as a "let to buy" mortgage. Lenders will want you to not exceed a 75% loan on your current home so that they have the security of knowing that their money is secure due to the level of equity remaining.
If you are looking to release equity to purchase a new property for rental then you will need to release a sum equivelent to 25% of the purchase price of the new property as deposit. Being able to cover this 25% is usually the quickest way of deciding whether your plans are feasable or not.
At Mortgages Online our team of experts can help you get a mortgage on a new property. We’re completely free and our service is easy to use – so minimal effort and no credit card required! So what are you waiting for? Get in touch!
We have a wealth of info on everything surrounding mortgages in our Articles section. From equity release, stamp duty info, mortgage rates and more! Find out all you need to about mortgages.