How much money should I borrow for a mortgage?
Are you looking for a way to release funds, the equity, that you have locked up in your house? It’s quite complicated, and it’s taken me years to get my head round it – it doesn’t help that I am number dyslexic (yes, that exists! It’s called dyscalculia). Which is why I have created this site, to be as clear as possible for someone like me!
I have a wonderful wife who used to work in the banking industry, and she understands all the clever stuff, so she has been in charge of all the finances throughout the years. That doesn’t mean I have had to be ignorant. I hope that it will point the way to being able to explore in more detail what you need to refinance your house, for whatever reason, but particularly remortgaging to gain the buy to let property, and help you understand some of the terms that are used. Also, I want to point out some of the pitfalls of borrowing too much, and actually how you might be a bit better off than you thought if you take some steps to cut down on your current outgoings.
There are many reasons that you may be looking to remortgage your house, often called refinancing. Do one of these apply to you already? Or is it just the last one?
- Debt consolidation
- Paying off outstanding bills
- Taking advantage of lower interest rates
- Reduce your outgoings
- Pay for unexpected financial commitments, or sudden house repairs
- Renovation work
- Sending the kids to college
- Releasing the equity (more about his later) in your house so that you can purchase another property or even invest in business (which is the central purpose of this site!)
There’s a whole host of reasons. You will probably have found on the internet, if you have spent any time on it, that there is also a lot of advice. It’s confusing, occasionally conflicting, and often surrounded in ‘fluff’. By that I mean that they tell you all the things you are doing wrong and try to sell you ideas that suggest you should borrow more than you need to so that you can achieve a dream holiday.
My word is this. Unless you need money, don’t go into debt of any kind. Period.