If you own a home outright and wish to get a mortgage, the procedure is typically simple. Because the lender considers the risk to be minimal, it is often simpler to acquire a remortgage on an unencumbered house than it is to secure a mortgage to purchase a new property.
Even while an unencumbered mortgage is normally fairly straightforward to obtain, it is not something you should hurry into. It is a financial commitment, similar to a traditional mortgage.
If you are confident that you want to pursue an unencumbered mortgage, you should hunt for the greatest prices (which Mortgage Experts Online can help you with).
What Is The Definition Of An Unencumbered Mortgage?
Simply said, unfettered is a term used to describe a mortgage-free property. Any outstanding loans and levies on the property have been paid off.
If you have paid off your mortgage or paid cash for your house, your property is now free and clear.
People may seek to refinance on an unencumbered home for a variety of reasons. Some people may desire to buy another home, while others may want to improve their present home or make a large purchase such as a car.
Mortgage Lenders Who Are Unencumbered
If you own your home outright, you will most certainly have access to some excellent bargains. Yet, it’s vital to bear in mind that certain lenders would consider it a new mortgage rather than a refinancing.
Although this has little effect, it is nonetheless vital to become acquainted with the procedure.
In reality, remortgaging means replacing a current mortgage with a new one. As your house is mortgage-free, a real ‘remortgage’ is not truly accessible. The procedure is ultimately extremely similar, which is why many lenders refer to it as a remortgage.
Because you have paid off your mortgage in full and now own your home fully, many lenders will consider you to be low risk. As a consequence, you should face a few obstacles in obtaining an unencumbered, and the Mortgage Experts Online team would be delighted to assist you.
When determining whether or not to refinance a house you currently own entirely, you should consider the following:
- What Is The Purpose Of Your Mortgage Application?
This might be for a variety of reasons. Perhaps you want to buy a bigger house or explore investing in real estate.
Home improvements, vacations, new automobiles, and debt repayment are all common reasons; nevertheless, it is important to note that your reason must be financially sound.
- Can You Afford It?
You are the sole owner of your property. Do you truly want to make a new financial commitment? Can you make the monthly payments?
These are the sorts of questions you can anticipate a lender to ask you when calculating your affordability for a new mortgage, so think about your responses before applying.
Remortgaging an encumbered property may not be the greatest option if you already have a lot of debt; however, this will depend on your unique circumstances.
If you need to free up some cash to pay off other obligations, you have various options. If you are in this situation, please contact one of our consultants to arrange a debt consolidation mortgage.
- Are You Willing To Accept The Risk?
Every mortgage carries some level of risk. You are in a pretty comfortable position if you have already paid off your mortgage and own your home outright.
Obtaining a new mortgage increases your risk. Even if you are financially secure, bear in mind that if you do not keep up with your monthly payments, you may lose your house due to repossession.
Bad Credit Unencumbered Mortgage
If you have had problems acquiring credit in the past owing to a poor financial history, it may be tough to secure a mortgage. While having adverse credit limits the number of lenders available to you, there are specialist lenders on the market that may help.
The age of your credit troubles will have a significant influence on your acceptance level. For example, if your credit problems occurred more than six years ago and your financial behavior since then has been outstanding, you should be able to get a competitive price from lenders.
Our credit experts are here to answer any inquiries you may have concerning your credit score. Contact us to learn how to improve your chances of acquiring an encumbered mortgage even if you have bad credit.