06 September 2018

There are other options rather than a full remortgage.

If you are looking to raise additional funds but are already on an attractive rate with your lender, there are other options rather than a full remortgage. Depending on the amount already lent as a mortgage, compared to the value of the property, some lenders will allow a ‘secured loan’ to be added as additional borrowing, right up to 95% of the property value. 
A secured loan is a 2nd, or subsequent charge which allows the equity in a property to be used as security.  The secured loan is usually repaid over a shorter term than a mortgage, circa 1-10 years, but the term can be longer, although this will increase the amount of interest repaid.   Second charge lenders are also in the midst of a price war.  Many have reduced rates, one or two new lenders have entered the market and rates can now be below 4%.  Rates vary depending on the customer’s circumstances and current level of borrowings.  Make sure you review all options available to you and always seek advice.
Alternatively, your existing lender may allow a further advance.  This would be a separate entity to your existing mortgage and again, will be subject to affordability and so on.  Normally, you will need to have had your existing mortgage for at least six months, before applying for a further advance.

Either of these might be a better and cheaper alternative over a shorter term, than a full remortgage of your first charge.

As I’ve mentioned many times, lenders are looking more carefully at affordability, not just for now but also any potential changes that may affect your income in the next five years. Be ready for some fairly detailed questions when submitting an application!

Finally, you buy a car from a car specialist, flowers from a florist, so for all your mortgage requirements, why buy anywhere other than from your local and independent mortgage specialist?

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