Further advance mortgages

If you’re thinking about giving your home a little upgrade – perhaps it needs a new kitchen, or maybe a loft conversion would give you a much needed extra bedroom – and you’re not sure how to fund it, join the club. If you’re facing rising education costs or you have a family member who needs financial support, you’re not alone. You might even have dreams of owning a second property or being a buy-to-let landlord, but saving for a deposit is proving difficult. If you’re a homeowner, you can overcome these hurdles with a further advance on your mortgage.

At Everest Mortgages, we help homeowners access further advances that suit their circumstances. From finding the best rates, to guiding you through the application process, our expert mortgage brokers ensure the journey is simple and stress-free.

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What is a further advance?

If you already have a mortgage and you need to borrow more money, you might want to consider a further advance. A further advance is an additional loan from your current lender, which is added onto your existing mortgage. Whereas a full remortgage involves potentially switching to a new lender and starting an entirely new mortgage, a further advance increases your current loan.

You’ll likely have a different mortgage rate on your additional borrowing, but if your lender’s further advance offering is competitive and you don’t want to deal with a new lender, it can be a worthwhile option.

Common reasons to get a further advance on your mortgage

When you first bought your home, you will have taken out a mortgage. This might have been a fixed rate mortgage or a tracker mortgage, a no deposit mortgage or a low deposit mortgage. Regardless of the type of mortgage you went for, you will have bought your home using a loan from a lender. If something happens and you need funds, you can increase that mortgage by applying for a further advance.

Further advances can be used to pay for a whole host of things, but they’re most commonly used for:

Home improvements or renovations, such as extensions, loft conversions, new bathrooms or kitchen upgrades.
Debt consolidation, as a way to combine unsecured debts like credit cards and personal loans into one manageable payment.
To cover the cost of large one-off expenses, such as education costs or family support.
Investments, such as buying another property or funding business ventures.

As a further advance uses your existing lender, it can often be quicker and simpler than a full remortgage. It’s even quicker and simpler if you use a mortgage broker, such as the team here at Everest Mortgages.

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How applying for a further advance works

If you haven’t applied for a further advance mortgage before, you might assume the process is a complicated one. But, that’s not the case. With Everest Mortgages guiding you from start to finish, applying and being approved for a further advance is likely to be simpler than you think.

Here’s what lenders look at when you apply for a further advance:

Equity – Lenders will look at how much you currently owe on your mortgage and how much your property is worth. Lenders will allow further borrowing up to a certain loan-to-value percentage, which can differ depending on who your lender is.
Affordability – Your income, outgoings and existing financial commitments are taken into account to ensure you can realistically repay the additional borrowing.
Credit history – Lenders will review your credit score and past borrowing behaviour, which will give them a good insight into how you’ve handled previous financial commitments. A strong repayment history with your existing mortgage can improve your chances of being approved.
Purpose of funds – Some lenders will ask what the additional funds will be used for, particularly if you’re wanting to borrow a large amount. Home improvements, property investments and debt consolidation are just some of the commonly accepted reasons.
Property valuation – Depending on the lender, a survey or valuation may be requested to determine the current market value of your home and assess the loan-to-value ratio.

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Who can benefit from a further advance?

A further advance mortgage is ideal for:

Homeowners with existing equity

The more equity you have in your property, the higher your potential borrowing amount. If you already have a fair amount of existing equity, you could be approved for a large further advance.

People looking to avoid remortgaging

You can access extra funds with a further advance without having to pay early repayment charges or exit fees on your current mortgage, which you will have to pay if you remortgage.

Home improvers and renovators

If you’re planning home improvements or a full renovation, a further advance could help you to invest in your property to increase its value, without having to take out a personal loan.

Homeowners looking to consolidate debt

Managing debt isn’t easy, but a further advance can be used to simplify multiple payments and potentially reduce interest rates.

Borrowers with good repayment history

Lenders prefer borrowers who have consistently made timely mortgage payments. If you have a good repayment history, your lender is more likely to approve your further advance request.

The benefits of a further advance mortgage

If you’re in need of extra funding and you have a home to borrow against, you will likely find that a further advance brings a lot of benefits to the table.

Convenience – With a further advance, you can borrow more from your current lender without the administrative burden and stress of going through the full remortgage process.
Cost-effective – As a further advance means staying with your current lender, you avoid fees associated with exiting your existing mortgage deal or switching to a new lender.
Flexibility – Funds from a further advance can be used for a wide range of purposes, from home improvements to debt consolidation. This gives you the flexibility to use a further advance in a way that works for you.
Quicker access – As your lender already knows your payment history, the further advance approval process tends to be quite quick.
Better rates – As the further advance is borrowed against your home, further advance interest rates may be lower than on personal loans or credit cards, making it a more cost-effective way to borrow.

With Everest Mortgages, you have mortgage experts on hand to make the further advance process smooth and stress-free. We take the time to understand your goals, assess how much you can realistically borrow, and match you with the most suitable deals and rates available.

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