How to Get a Mortgage on a Property You Already Own?

Getting a Mortgage on a Property You Already Own

One popular method for obtaining a loan on a property you own is to remortgage. This is how you can get a mortgage.

1. Property Valuation

Assessing the market value of your property is essential to calculate how much loan you can secure. Start with obtaining a professional valuation report of your property to determine its market worth. Lenders will approve a loan according to the present market value and conditions of a property. Consider the free valuation service of Estate Agent Power to find the market value of your property.

2. Compare Mortgage Lenders

After property valuations, try to receive quotes from multiple lenders and compare interest rates, terms, and fees to choose the best plan. It is the responsibility of borrowers to assess their needs and select a mortgage plan that fits their budget. You can also review different mortgage options according to your financial needs.

3. Collect Required Documents

Another important step in getting a re-mortgage on your existing property is to fulfil documentation requirements. Present proof of your income in the form of tax returns or paystubs. Collect all papers about the property you currently own, including the mortgage agreement and title deed. Make sure your credit score is high to increase your chances of getting a good mortgage rate.

4. Apply for Mortgage

After determining the market value of your property and preparing documentation, it is time to apply for a mortgage. Complete the mortgage application and attach the necessary supporting documentation. The lender will evaluate your creditworthiness and application before approving a mortgage.

5. Receive an Offer

Once your application is approved, you will receive an offer from the lender. Pay close attention to the details of the mortgage offer such as taking note of the interest rate, length of the payback period, and other expenses. Try to negotiate for a better offer if the terms don't satisfy you.

6. Complete the Process

Borrowing a mortgage on a property involves varied legalities. To obtain a mortgage, finish all paperwork and legal requirements. Ensure your previous mortgage is fully paid off and discharged, before transferring the new mortgage on an existing property.

Get a Mortgage on a Property You Already Own: Important Considerations

Re-mortgaging a property is a viable option to secure a loan with new interest rates, repayment length, and other terms. However, considering varied factors before applying is important. Some important considerations are:

1. Equity in Your Property: You might have amassed equity in your home over time, which could help you get a better mortgage and possibly negotiate better terms.
2. Interest Rates: Examine the differences between your current and mortgage interest rates. Remortgaging can help you save money if rates have dropped.
3. Repayment period: By extending your repayment period by remortgaging, you might lower your monthly payments but perhaps raise the total cost of the loan.
4. Legal and other fees: The process of remortgaging will incur legal fees. Stamp duty may be required of you, depending on your situation and the value of the property.