What can I take a Mortgage out for?

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When looking at what you can obtain a Mortgage for, we need to look at the lenders criteria. Some Mortgage lenders are quite strict on the reason for the Mortgage where as others say something along the lines of “anything legal”.

There can also be Loan to Value (LTV) caps in place with certain reasons when obtaining the Mortgage. Below I will explain the more common reasons for taking out a Mortgage.

Purchase – This is a simple one. You want to purchase a new home and so you take out a Mortgage solely for that purpose.

Remortgage – Again, another simple one. You already own your home and you would like to switch to a new deal to save some money or offer some security against rate rises or whatever the reason may be this would just be a straight forward switch with no additional borrowing.

Debt Consolidation – Now we start to get to some of the less simple reasons for wanting a Mortgage. Debt consolidation could be for any number of reasons. It could be that you have spent money renovating a house and now you would like to combine those into your mortgage or a secured loan in order to get your monthly repayments down. It could also be that you have spent money on your wedding for instance or a wedding for one of your children and now you wish to get the repayments from that spread out over a longer period. This can be tricky with some lenders as some lenders apply caps of 75% LTV.

Home Improvements – unlike the above example where you are consolidating money you have already spent on improving your home, this is where you apply for the money upfront and then spend the money doing the home improvements. This is typically more common where you are employing a builder and will need the funds ahead of time rather than a number of smaller jobs you are doing yourself.

Tax Bills – some lenders will allow you to raise money to pay a tax bill. Those of us who are self employed and file your accounts annually to be hit with a large tax bill that typically needs paying in one go, raising some money against your home to do this can be a good way to do that.

Fund a large Purchase – You may decide you want a holiday of a lifetime, a new car or something else which is important to you. We can look to help with that also.

Buy to Let – You may want to pull money from your home to go and purchase a BTL property or a renovation property for cash. Obviously you will need a significant amount of equity in your property to do something like this, but it is something we can potentially help with.

Second Home/Holiday home – Not too dissimilar from above, if you are looking to purchase a second home or holiday home then we can help you raise money for this purpose.

Business Purposes – You may decide you want to purchase a business, again there are lenders who will do this. We can even look at taking out a mortgage on a home you plan to use as a Bed & Breakfast, you can read an article on that here.

We do receive many different enquiries about raising money for all sorts of different reasons. The examples above have covered off the main reasons but as there are lenders who will lend for anything legal if there is something else you need the finance for, please get in touch to run it by us, we will be happy to discuss your options in more detail.