Remortgaging your house is a very common practice in the UK when looking to invest in buying a second house. This can be for a buy-to-let property or just buying an additional property for yourself.

These decisions are some of the most important that a person may make in their lifetime - and committing such a high sum of money can be a daunting prospect.

Throughout this post, we will be discussing some of the things you should most carefully consider when thinking about purchasing a second home.

Can I Remortgage To Buy Another House?

This is a commonly asked question by many people who consider this - whether it is possible. We are pleased to say that yes - you can do this, but only as long as you are eligible for a remortgage, and that the cost of your current home’s mortgage would cover the price of your new home. 

Another important point to discuss is that you must be able to convince your mortgage lender that you can afford to pay this alongside the new debt from the new property.

Depending on your yearly salary/income, remortgaging your current home may be necessary to be able to make an additional property purchase.

Credit History

Homeowners looking for a second home have plenty to consider before making this decision. However, one of the most pressing issues should be your credit history/credit report. This should be thought about before discussing your plans with a broker. 

Having bad credit history can incline some lenders to decline your application for a new property or offer you less appealing interest rates. However, there are specialist mortgage advisors such as our team at LTC Mortgages that can provide you with some advice on how to handle this situation.

There are also some mortgage lenders that work specifically with bad credit buyers - these people will happily work with you if you have a poor credit history. They will take into account aspects such as your age, reasons for your credit score and the severity of your poor score - and will offer you tailored deals to suit you and provide you with more options than you could have had otherwise.

A poor credit score does not include any outstanding debt or loan unless you have missed payments on them - however, the amount you owe could have a significant impact on your borrowing potential.

Equity

As a homeowner, you should always consider your equity when remortgaging your property, whatever the reason for doing so. Equity refers to the difference between the total cost of your property and the amount that you have already paid off; specifically the latter.

This is especially important when considering a remortgage of your house, as this can be a time when you will be able to release equity. A remortgage can help you capitalise on recent house price rises and ease some expensive, elevated living costs in the process. 

Calculating your equity is a fairly simple process too - there are many different tools online that you can use to do so and all are very easily accessible, this is also something LTC can help with if needed.

Types of Property

When buying a house, you must also consider the type of property that you wish to purchase. This refers to residential mortgages, buy-to-let properties, holiday lets, holiday homes/second homes and commercial properties.

Deciding which of these categories your property falls under is a vital aspect of the process - and the sooner that this is done, the sooner you will be able to contact mortgage brokers, lenders and any experts that you may need for support.

Conclusion

In conclusion, there are many factors that you must consider before making such an important decision. Choosing to remortgage your current property in order to afford another is an incredible commitment for a person to make - therefore, it is of the utmost importance for people to consider the pros and cons of what they are doing.

There are so many things that could get in the way of your idea, from declined mortgages to being unable to afford some hidden fees - all of which are relatively unknown to the average buyer, yet vital when it comes to remortgaging your property.

At LTC Mortgages, we can guide you through the process and find the best mortgage deals for you. We can also help you understand the costs involved in remortgaging and buying another house - from conveyancing to Stamp Duty Land Tax. Contact us today to get the ball rolling on the remortgage process.