If you want to make some home improvements but need funding, you may want to consider borrowing more on your mortgage. Visionary Finance explains what a further advance is, so you can decide if it’s an option you want to explore.
I want to borrow more on my mortgage – what is a further advance?
A further advance is when you take on more borrowing from your existing mortgage lender.
The additional borrowing is usually at a different rate than your existing mortgage.
Applying for additional borrowing can make sense if:
- The rate offered is competitive
- You do not want to remortgage or switch lenders
The interest rates on a further advance should be at a lower rate than what you would expect on a personal loan. However, with the fluctuations in the market that we’ve seen in recent years, a mortgage adviser would be able to investigate this for you.
Applying for a further advance on a mortgage
A further advance is most used by homeowners who are looking to:
- Make home improvements
- Save towards a deposit for a buy-to-let property
Each lender has different criteria to meet to be approved for additional borrowing a mortgage. You will have to meet the requirements set in order to be approved for additional borrowing.
Expert mortgage advice
There’s no one-size-fits-all when it comes to mortgages. That’s why it’s important to seek expert and impartial mortgage advice when possible.
Paul Dean, Mortgage and Protection Adviser says:
“As with all Financial Advice, it is imperative to seek expert professional advice, a further advance means borrowing additional money from your existing lender. The further advance can be used for a variety of legal purposes such as home improvements, school fees, separation, car purchase and/or other property purchases.
Speed of application and competitive interest rates are often client motivators; however, it is important to assess the risks of a further advance and if indeed it is the right option for you’’.
A further advance is secured against your existing mortgage. If you cannot keep up with your payments, you could be at risk of losing your home.
