Remortgaging was created to help real estate investors and homebuyers find a better deal with their mortgage. All thanks to remortgaging, real estate investors can pay up the rest of their current loan through getting a new one with better conditions. So, how does remortgaging work to buy another property? Do you need to go through the paperwork as if it were a new mortgage? Or can you follow up with the procedure as a continuum of your current mortgage?
How does remortgaging work to buy another property?
To simplify things for you novice real estate investors out there, we’ve created followable steps that both real estate investors and homebuyers can follow in order to secure a remortgage.
Think thoroughly about the reason to remortgage
Buying an investment property can be a hassle on its own. Securing the funding, on the other hand, can be a chapter in a book on its own. When remortgaging to buy another property, you must look for better terms than your current mortgage. Many real estate investors look for a more flexible mortgage and even lower mortgage payments. It’s important to come out of the remortgaging process with better terms than your previous mortgage.
How does remortgaging work to buy another property when you’re looking for a mortgage advisor?
Many real estate investors have done it without resorting to a mortgage advisor. However, this mortgage professional will have a variety of sources and selections and can probably get you a better deal and rates than you can find for yourself. Look for a mortgage advisor who is not selling a particular mortgage or a company. Of course, mortgage advisors can either take a predetermined fee or get a commission when the remortgaging process is done.
Accordingly, mortgage brokers will advise you on mortgage types and lenders and inform you of the details that you might miss about the mortgage. Keep in mind that when you’re remortgaging, it’s not that different than mortgaging the first time. However, you’re looking for better terms and a better overall experience.
If you’re wondering about the nature of working with a mortgage brokerage, read this blog post: What Is a Real Estate Broker and Does a Real Estate Investor Need One?
How does remortgaging work to buy another property when keeping affordability in mind?
Yes, it’s all fine and dandy when you get a mortgage. On the other hand, the story completely changes when you start making payments on it and factoring in your living expenses and running the investment property. So, make sure you are well-protected. The most successful real estate investors usually go for fixed-rate mortgages; this way you are cutting the uncertainty of mortgage interest risings. If you’re wondering about investment property mortgage rates, read this blog post: Investing in Real Estate: What Rental Property Mortgage Rates Can You Expect in 2018?
How does remortgaging work to buy another property when trying to stick with your original lender?
After having found a mortgage deal that caters to your advantage, the first thing a real estate investor can do is get back to the original lender of the current mortgage and try to get them to match the other’s offer. It’s worth a shot! You never know how much the bank would want your business and be willing to give you a lower offer to beat it. In this step, you should research getting the lowest investment property mortgage rates and make sure you do your homework before sticking to a lender.
How does remortgaging work to buy another property when submitting your remortgage application?
Whether you’re sticking to your current lender or going to another one, you’re going to have to submit an application. If you’re going to work with a specific mortgage broker, he/she will most likely set up and fill the application on your behalf.
Among the most common requirements for a remortgage application are recent credit checks, proof of earnings, and a home appraisal. These help the bank with processing your application and determining the terms and conditions that will have to apply to you. Before submitting your application, it’s recommended that you conduct a real estate market analysis for your property. This can help you determine the value of your current property in order to give you an idea of the valuation the lender will get through conducting a home appraisal. If you’re looking to evaluate your property through a real estate market analysis, give Mashvisor’s investment property calculator a shot and enjoy the 14-day free trial by clicking here.
If you have any more questions about conducting a real estate market analysis, read this blog post: Real Estate Market Analysis vs. Home Appraisal: What’s the Difference?
How does remortgaging work to buy another property when working with a legal expert?
You will most likely need the help of a real estate attorney or legal expert to help you with the legal transactions, specifically, if you’re going for a new mortgage lender. This task might be delegated to your mortgage advising firm, so make sure to ask if they offer legal services along the way. Additionally, the real estate expert is meant to help you with the movement of funds to cover the current loan and the arrangement for the new one.
Final words
Remortgaging to buy another property is something that all real estate investors and owners should consider when investing in real estate. This can be a viable option for you to expand your real estate investment portfolio and reduce mortgage payments. Moreover, real estate investors are becoming more and more aware that there are many financing and refinancing programs available. So, don’t hesitate to go for a remortgage. You might end up saving a bundle and reducing monthly payments along the way!
If you have any more insight on how does remortgaging work to buy another property, please share them with us in the comments section below.