Remortgaging your current home to buy another property is an increasingly popular option for UK homeowners. It can be a great way to access additional funds without having to apply for a new loan or go through the process of selling your current home in order to raise capital. So, what should you know before taking this route? Let’s explore the benefits and drawbacks of remortgaging your current property in order to buy another.
The Benefits of Remortgaging for Additional Funds
Remortgaging is often seen as one of the simplest ways to raise capital, and it can be useful if you are looking to purchase another property. The interest rate you pay on remortgage deals are usually lower than other forms of borrowing, and many lenders offer flexible repayment terms that will allow you to pay off your mortgage over a longer period of time. This means that you could potentially pay less each month on your mortgage payments than before. Additionally, depending on the size of your deposit, some lenders may offer cashback or other incentives when you remortgage which can further reduce your costs.
However, there are certain things that you should consider before remortgaging in order to buy another property. Firstly, if you are looking at buying a more expensive property then it is likely that your lender will require a larger deposit than if you were just refinancing alone – so make sure that you have enough saved up beforehand. Secondly, depending on how much equity is in your existing property and how much additional borrowing is needed, it may be necessary for the lender to carry out a valuation survey – meaning that there will be additional costs associated with the process. Finally, while remortgaging can be beneficial in terms of reducing monthly payments and making access to additional funds easier, it also means that you will continue paying off your existing mortgage plus any additional borrowing over a longer period – so make sure that this is something that fits into your budget long-term too!
For UK homeowners looking for an easy way to access funds without selling their current home or applying for a new loan – remortgaging their current home might just be the perfect option. However, it’s important not only look at potential benefits but also consider any potential drawbacks such as costings or needing higher deposits before making this decision. Ultimately though, remortgaging could provide an excellent solution for those hoping to buy another property without having all the necessary funds upfront – allowing them greater flexibility and potentially saving them money along the way too!
