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Remortgaging: Unlocking Your Options

Are you curious about the possibility of remortgaging, borrowing more? You're not the only one. As independent mortgage brokers serving clients in North Devon, this is a common query we encounter. Let's delve into the details and discover more about remortgaging, its potential for additional borrowing, and the crucial considerations involved.

Understanding Remortgaging and Additional Borrowing:

Firstly, it's crucial to understand what remortgaging implies and how the process of borrowing more works.

Essentially, remortgaging refers to the transition from one lender to another, often occurring at the end of a fixed rate or special deal, primarily motivated by a more favourable interest rate.

Remortgaging allows you to revisit your mortgage's entire structure and potentially alter its terms. There's a lot you can change with a remortgage!

You can modify the term to either lengthen or shorten it, which can affect your mortgage payments, making them more or less expensive, thus accelerating or decelerating your mortgage repayment.

You also have the option to change the kind of deal you have (e.g., from fixed-rate to something more flexible), pay off a part of the mortgage, or, as we're discussing here, potentially borrow more! However, it's essential to remember that all these changes are subject to the lender's criteria.

When borrowing more, you're essentially asking your new lender to provide a mortgage that includes additional funds. For example, you might ask, "Dear Mr Halifax, I have a £100k mortgage with Nationwide. Could I remortgage with you and borrow an extra £20k, making my new mortgage £120k?"

The question arises then, is this possible?

Is Remortgaging for Additional Borrowing Possible?

The straightforward answer is theoretically, 'yes'!

However, it's not quite that simple!

The decision hinges on two key factors:

  • The amount of equity available in your property to extract additional funds.
  • Whether your income can sustain the larger mortgage you're now requesting.

Therefore, conditional to these two factors, the answer to 'can I borrow more on a remortgage' is indeed a yes!

You can find more information on our remortgage page.

Considerations for Remortgaging and Borrowing More:

While remortgaging and borrowing more is feasible, it's paramount that you seek independent advice. It's ill-advised to rely solely on your current bank as they may not provide impartial advice.

Our independent mortgage brokers in North Devon can explore options with your current lender as well as the broader market. An independent broker will also ensure you comprehend the risks involved and assist in planning your financial future. Here are a couple of points you should consider:

Is Additional Borrowing Right for You?

The answer depends on your individual circumstances. Short-term additional borrowing may seem beneficial, but it's also important to consider your plans for the extra funds.

Remember, even though you may be able to borrow more on a mortgage, it must still be repaid eventually!

Are There Risks in Borrowing More?

Borrowing more on your mortgage can result in significantly higher costs over time. Mortgages can span years, meaning the more you borrow, the more it will ultimately cost you. Moreover, your mortgage is secured against your home, meaning that defaulting could lead to the loss of your home.

How Can Remortgaging and Borrowing More Be Beneficial?

While understanding the risks is crucial, borrowing more on a mortgage can be advantageous for some. In some cases it may help to consolidate existing unsecured debt (like credit cards or personal loans) by reducing monthly outgoings, but you should always take professional advice if you are in this situation because a mortgage is secured against your home.

Even if you don't borrow more, remortgaging can be beneficial as it presents an opportunity for a comprehensive review of your current arrangement, potentially saving you money and aligning your mortgage with your financial goals.

It's important to have a goal for your home and mortgage, whether that's to pay it off more quickly, by a certain age, or something else. Our independent mortgage brokers in North Devon can help you explore these possibilities and help turn your goals into reality.


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