There shouldn’t be any problems if you are looking to mortgage your house. Lenders don’t have to take any risk in obtaining a remortgage for an unencumbered asset. It is generally easier to get a mortgage to buy a home and remortgage it.
A remortgage that is unencumbered is generally quite easy, but it’s best to be cautious and not rush to select the first option. Consider many factors, such as the fact that a refinance is taking on a new financial obligation. It is important to choose the best mortgage deal to help you raise capital for the mortgage-free property.
What Does It Mean To Have An Unencumbered Home Mortgage?
The term “unencumbered” has a very specific meaning within the mortgage world. It simply means that a property does not have a mortgage. This means that there are no charges, restrictions, or loans. Your property is not encumbered if it has been completely paid off or you have purchased it in cash.
Therefore, the unencumbered mortgage is the term we use to refer to any remortgage on an unencumbered home. There are many reasons homeowners choose to remortgage to unencumbered homes. This could be because you are looking to move your home without having to sell your existing property.
You might also need to obtain capital to pay for home improvements or invest in a secondary property.
Unencumbered Loan Lenders
Many great deals are available to those who have unencumbered real estate. Some lenders will view it as a purchase, not a refinance. The principle of your mortgage will not change, so this shouldn’t be a problem. Before you apply, however, it is essential to understand the process of unencumbered remortgage.
Technically, a remortgage is a process of replacing an existing mortgage loan with a new one. It is impossible to remortgage your property if it is not mortgage-free. The processes for unencumbered homes are identical. This is why lenders may still classify it as a remortgage but others will refer to it as a new purchase. With so many lenders and fees at your fingertips, there are plenty of options.
Once you have paid off your entire mortgage or purchased the property outright, it shows lenders that your financial status is stable. You can then apply for a mortgage. Mortgage Experts Online will provide you with expert advice and guidance to ensure that your process is smooth.
Unencumbered Mortgage On A Property In Poor Condition
It is common for investors to buy deteriorated properties outright with cash. Then they will refurbish them to sell for profit or rent them out. Alternately, you might live in a property that needs refurbishment.
Unencumbered Investment Remortgage
Investors tend to buy with cash. This can be explained by one of three factors:
- The deal must happen quickly, as with auctions.
- The property is in such bad condition that it’s not eligible for a mortgage.
- They desire to be able to resell the property within 6 months. A mortgage would prohibit this.
Investors increase the property’s value by making renovations. To release capital for the next property or investment, they may remortgage. If you have the capital necessary to buy a property, you may be eligible for this.
Remortgages are a great option if there is a plan to hire tenants or you want to live on the property. It is important to note that you may be unable to qualify for a 6-month remortgage. You may need a mortgage in a shorter time frame than this.