You shouldn’t have any trouble obtaining a mortgage on a house that you own. Lenders have very little risk, so it is often easier to obtain a remortgage on an unencumbered house than it is to get a mortgage for a new property.
Unencumbered mortgages are usually quite straightforward, but you should not rush to make the most of them. Remortgaging means you are taking on new financial obligations. The best mortgage deals will be available if you are sure that you want to raise capital on a property without a mortgage.
What Is An Unencumbered Mortgage?
“Unencumbered” is a term that has a very specific meaning in mortgage terminology. It refers to a property with no mortgage. It means there are no charges, restrictions or loans. Your property is free from any restrictions if your mortgage has been paid in full or you bought the property with cash.
Unencumbered Remortgage refers to any remortgage of a home that is either ‘unencumbered’ (or mortgage free’). There are many reasons homeowners may decide to remortgage an unencumbered home. Perhaps you want to sell your property and move into a new home.
Perhaps you need capital to pay for home improvements or purchase a second property.
There are many great deals available for those who own unencumbered properties. However, lenders may consider this a new purchase instead of a remortgage. It shouldn’t impact your mortgage in any way as it is the same principle. It is important to have an understanding of the unencumbered process before you apply.
A remortgage is technically the act of replacing an existing mortgage with one that is new. Since your property is not mortgage-free, it is impossible to remortgage. The process is the same for the non-encumbered property. It is because some lenders still consider it a mortgage, while others call it a purchase. There are many lenders and fees to choose from so you won’t have a shortage of options.
You have proven to lenders that you are in a stable financial position by paying off a full mortgage or buying a property. Therefore, there shouldn’t be any obstacles to getting a mortgage.
Capital Raising On A Mortgage-Free Property
If you can own your property without a mortgage, you will be in a good financial position. Although it could be beneficial financially to take out a mortgage depending on your particular circumstances, this is not a guaranteed decision. Like any mortgage, it is important to consider whether an unencumbered refinance is a good option for you. These are some of the considerations to consider:
This is a new financial obligation. You currently own a home without a mortgage. Understanding the implications of a new mortgage will help you understand how it affects your finances. Do you feel comfortable paying a new monthly cost?
Risk – Mortgages can be a source of danger. Are you willing to risk your secure home by adding another element of risk? Failure to make your payments on time could result in the loss of your home. Even if you are financially stable, you should not ignore the possibility.
Do you want to make a home improvement? Why not invest in a property. Borrow as a personal gift. A new mortgage should make financial sense. An expert mortgage adviser can help you evaluate this aspect.
Debt- If you are already in debt, you may want to reconsider your decision before you take out a mortgage on an unencumbered house. Consider your circumstances and seek advice from a mortgage advisor. There are also specialist remortgages that can consolidate or consolidate your debts.