Remortgaging can be a great opportunity to do more than just refinance your mortgage to a better deal. Many homeowners release equity by remortgaging, and one common reason for doing so is to purchase a second property, such as a Buy To Let property or holiday home. If your home has increased in value or you’ve paid off a considerable amount of your mortgage, you may now have built up enough equity to purchase a second property. The first step is to get a current valuation on your home and then subtract your remaining mortgage balance from that figure to find out how much equity you have to work with. Before you do that, book in for a FREE no-obligation consultation with one of our specialist remortgage advisors – they’ll be able to guide you from the start and even help arrange your property valuation. In the meantime, have a quick read of this guide so you’re better prepared for remortgaging to buy another property.
Why Do People Remortgage to Buy Another Property?
Generally, homeowners remortgage to buy another property for one of these three reasons:
To purchase a second property or holiday home
Releasing equity to buy a second property or holiday home is usually a lifestyle choice. You may want to have a base closer to work to save on the commute, or perhaps you want to buy that dream home in the sun! Whatever your reason, remortgaging your primary home could be the best way to finance your second property or holiday home.
To purchase a Buy To Let property
Investing in a Buy To Let property can be a great way to supplement your income whilst potentially benefiting from capital growth at the same time. If you have enough equity in your home, you may be able to finance a Buy To Let property by remortgaging.
To turn your current home into a Let To Buy property
The reasons for doing this are the same as for a Buy To Let property. The difference here is that your current home will become the rental property, and the new property you buy will become your primary home.
How Do I Buy Another Property by Remortgaging?
The most common way is to release just enough equity to cover the deposit on your second property and the other costs such as stamp duty and solicitor fees. Generally, the larger your deposit the better, as this will give you access to a wider selection of mortgages, but it’s important you seek professional advice to find out how much equity you can release and how that will affect your current mortgage. Our advisors can help you find the right remortgage deal as well as your new mortgage, and these don’t have to be with the same lender if we see you can get better deals by separating them.
Your lender(s) will need to be confident that you can afford two mortgages, and being rejected can damage your credit score, so be sure to speak to us before applying. We have access to thousands of great products and we understand the criteria of each lender, so we can assess your situation and ensure you only apply for a mortgage you’re likely to be accepted for. We can also apply on your behalf to make the process a lot easier for you!
If you’ve built up a considerable amount of equity in your home, you may be able to release enough money to buy your second property outright. Doing this means you’ll only have one mortgage to worry about, and it could also be cheaper if the remortgage rates available to you are lower than the rates on a new mortgage. If you have the option to buy your second property outright, our friendly advisors will be able to work out the most cost-effective route for you.
How Much Equity Can I Release to Buy Another Property?
This is one of the most important answers to find out before deciding if remortgaging to buy another property is right for you. Unfortunately, there’s no simple answer here as it very much depends on your individual circumstances. Here are some of the factors that will affect how much equity you can release when remortgaging:
- how much your home is currently worth
- how much equity you currently own
- how long you have left on your mortgage
- your income and affordability
- your credit score
- your age
- which lender you choose!
To find out how much money you can borrow and at what rate please book in for your FREE no-obligation consultation – our advisors will assess all of the points listed above (and more) to find out what deals are available to you free of charge.
The Bottom Line
If you’ve dreamt of owning a second home or a Buy To Let property, remortgaging your current home could allow you to raise the necessary funds. If you have enough equity, you may be able to buy your second property outright, or you could raise just enough for the deposit on a second mortgage. How much you’ll be able to release and at what rate will depend on many factors and you should speak to a professional advisor to find out what deals are available to you.
We’ve been helping our local community buy second properties by remortgaging for over 30 years! We’ll search thousands products to find you a great deal that suits your needs perfectly. We’ll also guide you through the process and liaise with your lender and solicitor to ensure the process goes smoothly for you.
Book your FREE consultation with one of our friendly advisors to get going quickly. We have offices in Frimley and Basingstoke, or we can help you remotely via phone or video call if you’d prefer. We look forward to chatting with you!
