Our Guide on How to Remortgage to Buy Another Property

keys and a wooden house

If you are interested in buying a second home, whether that be a second house, a buy-to-let property, or want another asset and are wondering if you can remortgage to buy another property, then we have it all in this blog post from JG Mortgage Services Limited.

If you have equity tied up in your current home, you can use this to your advantage if you can’t afford another property outright. Read this blog post to understand more about whether you can remortgage to buy another property and the steps to take if you wish to do so.

 

Why You May Want to Remortgage to Buy a New Property

Everyone’s circumstances are different when it comes to mortgages and remortgaging. There are several reasons why people may wish to remortgage to buy a second property. Some of these reasons include:

  • Second/Holiday Home – A second home or holiday home can be a great place to escape for relaxation and can be beneficial. Lots of people enjoy having a property abroad for example.
  • Buy-to-Let – This could be an investment in a rental property for another source of income.
  • For Family – Helping a family member out such as your children and buying them a new home.
  • Let-to-Buy – This involves renting out your current home and using the rental income to purchase a new property. In this case, you will need a separate second mortgage.

 

Can I Remortgage to Buy a New Property?

Yes, you can remortgage to buy a new property, and in fact, it is a cost-effective thing to do to raise the capital you need to put a deposit down on another home.

When you release equity from your home to buy another property, you can use the money for a deposit. Remember, you will still have to prove you can afford the monthly mortgage payments to your lender.

 

How to Remortgage to Buy Another Property

You can release funds from your property to buy another one, as long as you have sufficient funds in your current mortgage on your current property. Remortgaging is a great way to unlock the capital that you have tied up in your home.

The amount of equity in your current home will play a big factor in the remortgage application as well as your income, credit rating and what you can afford.

If you wish to remortgage your home to buy another property, you should speak to your mortgage advisor, who will be able to advise you based on your unique circumstances and will be able to ensure that you take the most suitable remortgage option to become a homeowner for the second time.

Below are some of the key factors that will determine whether or not you are eligible to make this transition to remortgage to buy a new property – so if you are keen to learn how you can successfully do this, keep reading.

 

Equity in Your Current Home

As mentioned above, how much equity you have tied up in your current residential mortgage is what will allow you to remortgage and buy another home. You will need enough equity in order to be accepted for remortgage.

This equity is calculated by taking the current value of your property and subtracting the value of the mortgage secured against it. For example, if your property had a market value of £300,000 and the remaining balance of your mortgage was at £200,000, then the equity would be £100,000.

You can either get a full mortgage when you go to buy another property or you can replace your existing mortgage which will be a separate loan secured on your existing home.

The total loan-to-value (LTV) you can leverage against your property is in the range of 80% and 95% – this depends on the lender’s terms.

 

Affordability

Your affordability is another factor that will determine whether you are able to remortgage your home to buy another. This will be determined by looking at your current income, deducting your outgoings and assessing whether you can afford the potentially high monthly mortgage repayments.

Your affordability is especially important when looking at remortgages as you are placing extra financial responsibility on top of your situation. Therefore, you need to be able to prove you can safely afford the additional costs of the monthly repayments that a remortgage can land you with, otherwise, you could be rejected.

 

Income

Your current income will play a significant role in determining your remortgage eligibility. Mortgage lenders will look at your financial situation and determine the size of your remortgage. The size of your income will be judged from your annual income, including from different sources.

 

JG Mortgage Services Limited

With access to a wide variety of lenders, JG Mortgage Services Limited is an independent mortgage brokerage that has all the tools and resources needed to help you find the appropriate mortgage deal for you if you are planning on remortgaging your home to buy a new one.

Whatever your reasons may be for wishing to remortgage to buy another property, we will be by your side and assist you with this. We have every confidence that we can find the right lenders that can offer you a new deal.

If you wish to know more about remortgaging or to find out exactly if you qualify for remortgaging to buy a new property, then you can come to us – our team will be happy to help you further!

Contact us today to speak to our professional and friendly team that offers unbiased and tailored advice. We embrace your unique circumstances and know that one size does not fit all. Trust us with your remortgage today by calling us on 01244 738422 or emailing info@jg-mortgage.com.