Can I get a mortgage on a mortgage-free property?

When there is no mortgage on a property – you have repaid any mortgage and own your home outright – it is said to be mortgage-free. The technical term for such a mortgage-free property is an “unencumbered” property – it is unencumbered by any mortgage, loan, charge, or other financial restriction.

Why mortgage an unencumbered property?

If you own your home outright, there is valuable equity locked up in its market value. You might want to release some of this potential to raise extra cash – for any number of reasons, but these might include and are not limited to:

the funds to renovate, extend or improve your home; you plan to move home but want the funds to keep the existing property to let out to tenants; or to invest in other property; to consolidate debt.

To raise those funds, you have the option of remortgaging your current home. Strictly speaking, of course, a remortgage is the replacement of one mortgage by another one. In this case…

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What are my divorce and mortgage buyout options?

Divorce rates in the UK have been climbing, said a report in the Telegraph newspaper on the 17th of April 2020. Indeed, a story in the Evening Standard on the 6th of January 2020 revealed the staggering statistic that, in that week, the volume of online searches for “I want a divorce” was 230% higher than in the first week of January just the year before.

In the trail of many of those divorces are likely to come difficulties with any mortgage arranged during happier times. So, let’s take a closer look at some of your mortgage buyout options following a divorce.

Selling up

Perhaps the most straight forward solution to the problem of dividing equity in a mortgaged home is simply to put it on the open market and sell it.

Provided there is no negative equity, the outstanding mortgage can be paid off using the proceeds of the sale, and the remaining equity may be treated as a marital asset in the normal way and be divided accordingly. If that div…

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Can I remortgage to pay off debt?

Do you remember when you arranged your current mortgage? A lot may have changed since then:

your home is likely to have increased in value – according to statistics in June 2020, UK house price growth is up 2.4% on the year, and has increased from 1.6% at the start of 2020; if you have any kind of repayment mortgage, your monthly instalments have been taking care of both interest and capital repayments – you owe less now than you did at the beginning; the rise in house prices, together with the reducing balance of your current mortgage, mean that the loan to value (LTV) ratio between your outstanding loan and the value of your home is lower now than when you first arranged your mortgage; and new mortgage products are likely to have come onto the market – potentially offering improved terms and conditions, along with more competitive rates of interest. You can remortgage

All of these changes may help to create the conditions you need to remortgage yo…

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Can I remortgage to build an extension?

Against a background of an uncertain housing market, many people will consider improving their home rather than moving. That option is likely to gain even faster ground as homeowners weigh up the cost of moving – putting the current home on the market, the lottery of buying a new house, legal and professional charges, and the hiring of a removal company, to name but a few.

That’s not to say that there are no costs in building an extension, of course. One of your initial decisions is whether there is an economic case to be made for building an extension – so, whether the cost of building is less than the eventual increase in the market value of your home. As an article in Homebuilding & Renovating on the 12th of May 2020 suggests, this may be a difficult case to make, and you might need to look at other properties in your area with similar extensions to see how they are currently valued.

Let’s examine some of your options for financing such a project …

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Can you add legal fees to your remortgage?

If you want to take advantage of a more attractive mortgage deal or increase your borrowing against the security provided by your home, you might want to consider a remortgage. A remortgage simply replaces your existing mortgage with an alternative that typically offers more favourable terms and conditions, greater borrowing, or repayment terms over an extended period.

These might all be compelling reasons but, when deciding whether or not to remortgage, you will also need to take into account the cost of doing so and weigh these against any benefits you might enjoy.

The cost of remortgaging

The following are some of the costs you might expect to pay – both for leaving your current mortgage and for setting up the replacement remortgage:

Early repayment fees

if your mortgage is still on a fixed-rate or tracker period, your current lender is almost certain to recover some of the lost earnings from a higher rate of interest by charging y…
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How can I pay for home improvements?

Normally held in April, the National Home Improvement Month in 2020 has been postponed until September. The campaign is no less significant for that slight delay. In 2019, it prompted at least 17 million homeowners to improve their homes in some way and 2020 is expected to see even more of them follow suit, say the organisers.

The organisers point to surveys that show the most favoured parts of the home for improvement – with some variation between all respondents and those in the younger, under-25 year-old age group:

kitchen – 20% of all respondents, but 18% in the younger age group; bedroom – 18% of all respondents, but 25% amongst those under 25; and living room – 14% of all respondents, but the bathroom for 10% of under-25s.

In truth, of course, and depending on the house you live in, you will have your own list of priorities when it comes to home improvements.

Apart from those priorities, one of your major concerns is likely to be…

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What are let to buy mortgages?

If you have owned your existing home for a while, naturally, you are likely to have grown fond of it. More often than not, its value has increased in line with the overall increase in house prices. As you have been paying off your mortgage, so your equity in your current property is also likely to have increased.

So, a home that you have grown to love and one that has increased in value may be one that you want to hold on to as a long term investment if you decide to move home. Not only that, but it might also give you the chance to release some of the equity in your current home to buy the new, second property.

How does a let to buy mortgage work?

Let to buy mortgages offer you the opportunity of doing precisely that. As the term suggests, this type of mortgage is based on your letting your current home.  So, its value continues to work hard for you through the income stream from rents, and you also release some of the equity you own in that hom…

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What is an Islamic mortgage, and how does it work?

Unless you are from a Muslim background or faith, you might easily dismiss an Islamic mortgage as being too specialist for you. You probably regard such a mortgage as one reserved for those who profess a particular faith – with the religious connotations somehow tied up in terms of the mortgage.

In fact, Islamic finance products in the UK are treated in the same way as all others – they are subject to the same regulations and legislation as any other mortgage product and mortgage lender pointed out a paper in Lexology on the 1st of October 2019.

Indeed, the UK government has positively encouraged the growth of Islamic finance for at least the past 30 years’, according to an official paper entitled UK Excellence in Islamic Finance. In the past ten years’ or so it has consciously developed a fiscal and regulatory framework to reflect that fact.

What is a Sharia-compliant mortgage?

An Islamic mortgage is one that's compliant with Sharia law. Th…

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Mortgages for people aged 60 and over

As you get older, it becomes increasingly more challenging to get a mortgage.

From the mortgage lender’s point of view, the reasoning may be understandable. Mortgages are designed to be repayable over many years’ – 20, 25 or even 30 years, let’s say. For anyone taking on a mortgage when they are aged 60 or over, therefore, they are likely to be well over 80 years old before the mortgage reaches full term.

Along with all the usual calculations based on your current income, expenditure, credit record, and loan to value (LTV) ratios, therefore, any lender may also need to start looking at your income during retirement when determining the affordability of any loan – in other words, what your pension is likely to be worth and the affordability of the mortgage repayments.

Against those difficulties and the natural wariness of mortgage lenders, however, it must also be recognised that the population is ageing and that we are all living longer lives. …

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Retirement interest-only mortgages explained

Interest-only mortgages have the attraction of relatively lower monthly repayment costs – you are only repaying the interest in those instalments and delay repayment of the capital amount until the end of the mortgage term.

Apart from that broad appeal, however, interest-only mortgages may have a particular appeal to the older homeowner – and these are called retirement interest-only mortgages, or RIO mortgages.

When they first appeared on the market, take-up of these retirement mortgages was relatively muted, argued an article in the FT Adviser on the 25th of June 2020. At that time, around 12 different lenders were offering 38 RIO mortgages of one type or another. That number has now grown to 20 lenders with 87 products on offer.

What are retirement interest-only mortgages (RIOs)?

Retirement interest-only mortgages are only available for those over the age of 55. They are likely to be a particular interest to older borrowers who are in or …

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