Yes! There are various different reasons why you might want to remortgage your current residential home in order to purchase an additional property, but unfortunately it’s a topic that far too often seems tricky to understand.
Fortunately, getting to grips with remortgaging can be of real benefit for your financial well-being, as you can ensure that you are making the right decision by remortgaging to buy another property for the sake of your bank balance and credit score both now and in the future. It’s more than possible for you to remortgage your current home in order to gain the funds to purchase an additional property, but it’s vital that you can benefit from the best quality advice and support along the way.
The team at Bolt Mortgages are committed to providing every homeowner with the best advice and options when it comes to remortgaging to buy another property. If you would like to find people that you can trust to guide you through the process of remortgaging your property in the most risk-free manner, then it’s certainly a good idea to reach out to a respected source like Bolt Mortgages!
Why would you want to remortgage to buy another property?
There are many reasons why you might need to remortgage your current home so that you can invest in a second property, whether you are becoming a landlord, buying a second home or even investing in commercial premises for a business.
- Becoming a Landlord
An interest only buy-to-let mortgage is a great way to begin your property portfolio as a landlord. A holiday let mortgage will enable you to buy a property with a plan for short-term lettings, and if you want to move to a new property but keep your original home and rent it out, the let to buy system enables you to alter your mortgage terms appropriately. All types of letting processes can be financed through a remortgage deal!
- Buying a Second Property
Whether you require a smaller flat in the centre of a city to limit your weekday commute, feel the need to look after your elderly parents by purchasing a granny annexe, or would even enjoy your own family holiday home, then using the process of remortgaging can be totally ideal.
- Buying a Commercial Property for Business use
You can remortgage your residential property in order to invest in a commercial property in many instances, which means you can find the funds to start up your own business if you have the inclination to do so. Remortgaging allows you to access a lump sum of funds to use in many ways, and using this cash to generate an even bigger income is a super smart choice that you should definitely consider!
Factors to consider before you decide to remortgage your property
There are a number of different factors that you should take into consideration before you decide to remortgage your property.
Every individual must go through a series of affordability checks before they can be granted the option of remortgaging. A mortgage provider needs to have faith that you’re going to be able to pay them back. This means your personal details, income, credit commitments and monthly outgoings will be investigated to determine your overall creditworthiness. Depending on your specific reasoning for remortgaging your home to buy an additional property, a provider will likely also need to think about any future monthly costs relating to that particular property which may affect affordability.
It can be beneficial to understand how much equity you have in your current property. This can be done by taking the value of your current home, minus any other mortgage or secured loans that you are soon to have against it. This is then referred to as ‘LTV’ (Or Loan to Value).
- Stamp Duty
Stamp duty can be a real nasty surprise when you are going through the process of buying an additional property. It’s always beneficial to research your Stamp Duty Land Tax liability when you are considering purchasing any property, but more importantly when you are investing in an additional property. By doing this research in the early stages, you can limit your budget for your additional property so that you can keep some money aside to cover the stamp duty cost.
- Early repayment fees
If you want to pay off either of your mortgages early, then you are likely to be hit with early repayment fees. This is something you should certainly take into consideration to maximize your money and get the best deal that is lenient and flexible, as you may be left with a hefty sum left on your mortgage despite handing over an enormous fee simply due to the added taxes.
How to remortgage to buy another property
The first step that you should take when looking to remortgage your property is to speak to us at Bolt Mortgages so that you can benefit from the best advice. They have assisted many customers on a regular basis, and are more than aware of the most effective and worthwhile remortgaging routes for you to explore, depending on your unique circumstances and needs.
You have the option of one, two, or three mortgages:
- One: allows high equity primary property to release funds to clear any existing mortgage debt and invest in a second property in full, meaning you will remain with just one remortgage tied to your first property.
- Two: the most common option, occurs when there is enough equity left in the primary property to replace the first mortgage and release funds which can act as a sizable deposit on a second premises. As a result of this, you will have a larger mortgage on your first property, and a second mortgage on your new property.
- Three: whenever you apply for a second charge remortgage (or a ‘secured loan’) on your primary property, while leaving the original mortgage in place, you can use the money released as a deposit for the third mortgage that you used to buy your second property.
Be sure to contact Bolt Mortgages if you have any interest in remortgaging, as their expert team of professional and reliable advisors are ready and waiting to surpass your expectations! Reach out by phone or email today to see how Bolt Mortgages can help you to achieve the property portfolio of your dreams.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE