Equity is the difference between your property value and your outstanding mortgage. If you have enough equity in your property you may be able to release some of this equity to use for any legal purpose, e.g. perhaps to make repairs, home improvements, a deposit for another property or to give to your children as a deposit for their own home, etc. This is called additional borrowing and it can be done in two ways using a mortgage.
THINK CAREFULLYBEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBT SECURED AGAINST IT.
Securing short term debts against your home could increase the term over which they are paid and therefore increase the overall amount payable.
You can do this by either switching your mortgage to a new lender (known as remortgaging) and increasing the sum borrowed at the same time; your old mortgage gets repaid and you are left with the additional money as cash. Otherwise, you can take out a further advance with your current lender.
Which of these options is best for you will depend on your individual circumstances. There are factors that need to be carefully considered, for example, remortgaging may allow you to get a better deal elsewhere, however you may have Early Repayment Charges for leaving your existing lender. A Further Advance allows you to stay with your current lender, however the additional borrowing is typically at a different rate to your main mortgage (potentially higher) and also typically has a minimum amount requirement.
Either way, it is important that you feel comfortable with any additional monthly payments and they are affordable.
There is an alternative way of releasing additional money from your property, which does not include amending your mortgage. This is known as a secured loan. Should you have a need for a secured loan you will be referred to a third party provider for advice. Neither Hadley Clarke Mortgages nor First Complete Ltd is responsible for any advice provided by a third party.