Can you remortgage an unencumbered property to pay cash for a new one?

Answered on 17 May 2019 by Nick Morrey


Can we remortgage our existing property so that we can be cash buyers and in a position to move very quickly when we find a new home? Could we then just carry on paying the mortgage on the old one until we can sell it?


Remortgaging an unencumbered property

Subject to you meeting residential lenders standard overall affordability criteria, then this would something you should be able to do. By remortgaging you are looking to borrow money from a lender who takes a charge over it. You may own your home outright (like yourselves), which can also been known as unencumbered property (when you own a property outright with no mortgage or loans secured against it), or already have a mortgage on the property and want to change lenders for a better deal or to get more money—either way, it's known as a remortgage.

Other Ways To Finance A New Property Using Your Exisiting Home

Alternatively you could look to do a 'let to buy', using your existing property (subject to the rental income it is likely to generate) to capital raise up to 75% of the value, which will then enable you to use the funds to buy the new property. Most buy-to-let lenders will cap the LTV at 75%, though there a few who will go slightly higher, if you wanted to explore that option.

More and more people are using let to buy to give them greater control over when and for how much they can sell their current property for, and also to bolster their income and even for retirement planning.

Obviously, we would need to know the fuller picture around your financial situation, but it does look promising.

If you'd like to explore your alternatives further feel free to call us on 0344 346 3672.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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