Updated 19th September 2020
An unencumbered remortgage happens when you own a property outright with no mortgages or other secured debts on the property. This could arise from recently paying off the mortgage or buying a property outright such as at an auction.
You may now want to raise some capital from the property, which you can do so with an unencumbered remortgage. Homeowners may wish to remortgage an unencumbered property for a number of reasons, such as debt consolidation, home improvements, purchasing another property or capital raising for any legal purpose.
Check out our ‘all you need to know’ guide to unencumbered remortgages below, where we’ll answer all of your commonly asked questions.
Remortgaging a property you own outright is indeed possible. One major factor to consider is that some lenders will class this as a purchase, and as such, you will not have access to the benefits that come with a standard remortgage. This can also be known as an unencumbered mortgage as well as a remortgage.
A remortgage is based on you currently having a mortgage already in place, however some lenders class an unencumbered property as a remortgage. Your mortgage expert will be able to advise you on the best lender for your circumstances. Ideally you would want a lender to class this as a remortgage, as this means you will get the usual benefits of a free valuation and free basic legal work.
Each lender will have their own way of assessing this type of application. We recommend talking to a mortgage expert, as they’ll be able to inform you which lenders will class this a remortgage and provide you with the best deal for your circumstances.
You can learn more about remortgages here.
Can I remortgage my unencumbered property with bad credit?
Yes, there are specialist lenders who will consider you even if you have had bad credit. With any bad credit mortgage, the interest rate will be higher than a standard high street mortgage. To check your credit report, click here
The severity and recency of the adverse credit will also be a factor. Your mortgage expert will have access to the whole of the market and be highly skilled in placing you with the best lender.
Learn more about bad credit mortgages here.
Can I remortgage my unencumbered property I have inherited?
Often be a difficult time both emotionally and legally. When you have inherited an unencumbered property you may be wondering what your options are.
If you need to raise capital from the inherited property, your available options will depend on what you are raising the monies for and how long you have had the property for.
When you are remortgaging a property within the first 6 months, there will be some restrictions in place. To find out about these restrictions in more detail, check out our post on remortgaging within 6 months.
Additionally, your mortgage expert will be able to provide you with the most up to date information regarding this if you have any further questions or concerns.
Can I get an unencumbered mortgage to pay off debts?
Yes, providing you meet the criteria of the lender and pass the affordability checks. With any debt consolidation remortgage you need to ensure this is right for your circumstances. If you are securing debts against your property, then seeking expert advice is a paramount. Your mortgage expert will ensure that you are aware of the costs and risks involved.
Each lender will have their own LTV restrictions for debt consolidation remortgages. Read our guide to remortgaging for debt consolidation here.
Remortgage an unencumbered property which is in poor condition
Investors can purchase a property for cash then look to remortgage the unencumbered property to release some funds for their next project. Typically, properties are purchased at auction for cash and sometimes these properties will need renovating to modernise and make the property more appealing.
A key aspect of getting a mortgage on any property is that it must be habitable. Generally, this means:
- The property must be watertight
- Kitchen & bathroom fitted and useable
- Safe to live in – self contained
Once property is classed as uninhabitable, you will need to look at refurbishment or bridging finance to bring the property to a mortgageable level.
Speak to an unencumbered remortgage advisor.
There are many lenders available ranging from high street to specialist lenders. Most people go to their own bank, get declined or can’t borrow what they need. Just because one lender has declined you, don’t give up!
Our mortgage experts will look at each case before deciding which lender is right for you and your individual circumstances. All the mortgage brokers we work with are whole of market and offer unbiased advice. They will have access to all the specialist lenders to really enhance your chances of achieving the mortgage you need.
The expert brokers we work with have experience in dealing with all aspects of unencumbered remortgages, and importantly using the whole of the market to access the best deals available.
To find out how we can help call us on 0300 124 5655 or complete our enquiry form to speak to a mortgage expert.