If you already have your mortgage with us or are considering moving your mortgage to us, you may be able to borrow additional money on top of your current mortgage.
What is Additional Borrowing?
Additional borrowing on your mortgage is borrowing more money from your existing mortgage lender, secured against your property. This can be for many reasons, including to fund home improvements or raise money to buy another property.
What can you borrow?
You may want additional borrowing for a number of reasons, some of the most common are detailed below;
Home improvements is the most common reason for borrowing extra money. With a home improvement advance, you can attempt to increase the value of your property by redeveloping existing rooms such as upgrading your kitchen or bathroom. You may be looking at making your home more suitable to your changing needs by extending and adding extra living space which may be a cheaper alternative to selling and moving to a new home. Borrowing more for home improvements can help increase the value of your home or energy saving improvements, such as double-glazing or a new boiler could save you money as well as add value. Any additional funds will be secured against your home, so you should fully consider this before applying for additional borrowing.
Either way, you can borrow up to 95% loan to value from us to complete home improvements. Where the improvements exceed £20,000 or involve structural alterations we will however limit this to 75% loan to value at each stage of the works. You will need to provide us with estimations for the work needed to be completed to support your application and re-inspections may be required at different stages.
While we all want the best for our children, private school fees are often expensive and difficult for many of us to afford. Research by the Independent Schools Council in 2019 showed that private school fees can range from £4,763 per term up to a massive £11,565 per term (including boarding). For this reason, some mortgage lenders will allow you to borrow more on your mortgage to fund these fees. Please note, this is not an option we will consider at The Tipton.
Where a mortgage has been taken out in joint names, both parties will be responsible for the mortgage, regardless of whether they both still live in the property. Due to this, in the event of a divorce, many will borrow more on their mortgage to allow them to buy the other party out of the mortgage/property. This results in the property and mortgage being held in sole name going forward.
The rate on your mortgage is likely to be low in comparison to loan and credit card interest rates and therefore it can be tempting to borrow more on your mortgage in order to pay off any outstanding debts you may have. While this is available at many lenders, there are also other factors to consider when looking to do this. These can be explored further at www.moneysavingexpert.com/mortgages/move-debts-to-mortgage/. Please note, this is not an option we will consider at The Tipton.
Please note, this is not an option we will consider at The Tipton.
Capital Raising (e.g. a Property Purchase)
Capital raising is a form of additional borrowing that will allow you to borrow more to fund an investment. This is usually for costly investments, such as a new car or to purchase another property. At The Tipton, we will lend you up to 80% loan to value to fund the purchase of another property. Where you are looking to capital raise to buy a partner out of your existing mortgage we will consider up to 90% loan to value.
In order to borrow more on your existing mortgage, you will need to satisfy your lender’s affordability assessments, as you would have when you originally applied for the mortgage. Your Mortgage Adviser will assess your income and outgoings to determine the amount of additional borrowing you can apply for. The amount you can borrow will also be restricted by each lender’s lending criteria, which will limit additional borrowing to a set loan to value (a percentage amount of borrowing in comparison to the value of your property).
What proof do you need to borrow more on your mortgage?
In order to apply for additional borrowing on your mortgage, your lender will require certain documents from you. While these will vary per lender, they are likely to include the below as a minimum:
- Proof of identification;
- Proof of income (in the way of bank statements and payslips);
- A new credit check;
- Quotes for any home improvements; and
- Proof of any debts being consolidated.