A further advance is a top up to an existing mortgage usually within the remaining term of the existing loan. It is probably the most cost-effective way to raise additional funds and involves much less legal and administrative work than remortgages and second charge loans.
However, in some cases a remortgage might offer a better deal overall. Second mortgages can quite often be used to avoid potential problems involved with taking a further advance, like paying a higher lending charge.
A Further advance will usually run for the remainder of the term of the original mortgage, although it might be possible to arrange it over a shorter term. Sometimes lenders will set a minimum term between five and ten years.
Arrangement fees are generally lower than what you will have paid to take out the original mortgage and early repayment charges might apply if the further advance was on a special rate.
It’s worth noting that a further Advance is a lot faster and less costly than a remortgage or Second Charge loan as the lender will already have a track record of you and your property information and in many cases will not require any conveyancing from a solicitor.
If you are undecided on whether to remortgage, take out a Further Advance or a Second Charge Mortgage then click here and one of our brokers will advise you which suits best.