How Does Remortgaging Work To Buy Another Property?

If you want to remortgage to buy another property, you’re probably wondering how you can make that happen. In this guide we’re cutting straight to the steps you need to take to get one step closer to securing another property.

So, how does remortgaging work to buy another property?

The equity in your current property will be a significant factor in your remortgage application.

Your equity is calculated by subtracting your mortgage debt from the value of your property and assets. As long as the equity outweighs the debt, you can use this to help secure a deposit for another mortgage.

How much equity you need will depend on your mortgage lender’s remortgage requirements and how much you need to borrow. It’s worth speaking to a mortgage advisor who can help you calculate how much equity you require.

Other things that will be taken into consideration are your income, credit status and affordability – this is pretty much the same criteria that will have applied when securing your first mortgage.

When you look to remortgage a property, you have two options:

• Secure a full remortgage that replaces your original mortgage
• Apply for a second charge mortgage which is a separate loan secured on the home

Getting a decent remortgage on your first property should enable you to free up some money to afford another mortgage, or even replace your original mortgage by paying off your first one.

Having several mortgages on the go can be quite the juggling act so lenders will need to ensure you can comfortably afford to repay both.

What do you need to do?

• Inform your mortgage advisor of the reason for your second home purchase

It’s important to share the nature of your second home purchase with your remortgage advisor as this will help them find the right type of mortgage for you. It will also be taken into account by lenders.

Frequently seen reasons for purchasing a second home include:

• Becoming a landlord (buy-to-let property)
• Buying a second home (typically a holiday home)
• Buying property for commercial use

Agentis can help keep the costs of your remortgage down by searching the whole of the market for the best deal. We can also help you make sense of the market to ensure you have the best chances of securing another property through a remortgage. Speak to our expert mortgage brokers and advisors  today to arrange your free initial consultation.

*You may have to pay an early repayment charge to your existing lender if you remortgage.