When you hear about friends or family who have managed to afford a place in the sun as a holiday home, do you feel a little bit envious and sigh wistfully, hoping that one day you can do the same?
If so, that sunny holiday retreat could be yours and you don’t even know it yet. If you’re already a property owner in the UK and Europe, you can use your own house by remortgaging it to raise enough cast to buy a new place. For most home owners still paying off their mortgage, remortgaging is a great move anyway, as it can get you more favourable interest rates or a better deal all round.
But it’s also a fantastic way to release some equity locked inside your house, so you can raise a lump sum for something special, like a wedding in the family, a dream round-the-world cruise, or a brand new villa in the sun.
Whatever your reasons for remortgaging, you can make the whole process easier and more accessible by consulting an independent mortgage advisor. Professional mortgage advisers have access to many more remortgaging products than an individual normally has, and these experts also have a huge network of connections and financial lending organisations that they’ve built up over years of being in business.
Russell Sanders, from independent mortgage broker Fresh Mortgages, based in Berkhamsted, Hertfordsire, says,”We’ve got some pretty complex software tools that can calculate the mortgage products available to a mortgage applicant, depending on their unique situation, such as value of their existing property, age, employment situation and income. Within a short space of time we come up with a shortlist of mortgage lenders who have a product to suit you, whether it’s remortgaging, buying to move to a new home or a buy-to-let.”
I ask Russell what type of person, in his experience, is interested in remortgaging.
He answers, “There’s a wide variety of reasons why people come to me for remortgaging advice. Recently my clients include couples who own their own homes but have extra land in their garden, and want to raise some money to build a house on the extra space. The cost of building a house is always less than the market price quoted by an estate agent, as the ‘for sale’ amount includes the cost of the land.”
Russell continues, “Loft conversions are very popular these days too, as the cost of extending a house can be less than moving to a larger place, and a lot more realistic if you don’t want to get a completely new mortgage loan. And of course some folk want to raise some money for a buy-to-let, so they get constant rental income. This includes the scenario of buying a holiday home that you rent out commercially for some or all months of the year, giving you an income over the summer months while you may want to use it as a retreat in the winter.”
Do the mortgage lenders differentiate who they lend to on the basis of what you want the money for?
Russell smiles and says, “All they want to know is that it’s legitimate and that you won’t use the money for something disreputable. Buying a holiday home is a very common reason for wanting to remortgage, especially since the rise of the popular TV show, A Place in the Sun. The mortgage lender will want to know the address of the property you want to purchase, so they can check it exists and it’s worth the money they’re lending. So yes, you do have to verify your reasons for applying for the loan.”
“But that’s the same if you were going to buy a home in the UK. Financial lending of all types has really tightened up since the financial crisis, so all lenders should want to know why you’re asking for the money. I’ve even heard of cases where people are releasing savings held in bonds, and the financial organisation they’ve been saving with wants to know why they want their money back!”
Fast and Easy
I ask Russell to put in a nutshell why someone should go to an independent mortgage broker.”Because we’re independent we won’t push products onto you that aren’t appropriate for you. We can search around a wide range of mortgage lenders to find the product that suits your personal requirements, such as early repayment over a reduced number of years, or extending the repayment period to more than 25 years, or a fixed interest rate for the initial years if you’re just starting out on the property ladder and the move has left you only able to afford a certain amount for the foreseeable future.”
“Above all, an independent mortgage advisor saves you time, so you don’t have to spend hours visiting banks and building societies and talking through your requirements with lenders who may not have the product you want in the first place. We give you a selection of eligible options, rapidly and at your desk or home. No legwork required!”