Birmingham Midshires Further Advance
If you have a mortgage with Birmingham Midshires you may be able to borrow extra funds if you ever required to do so. This is known as a Birmingham Midshires Further Advance.
Firstly before we get into how to get a Further Advance, who are Birmingham Midshires?
The UK-based financial organisation Birmingham Midshires focuses on offering mortgage products and savings accounts. It was initially established in 1986 as a building society before changing its status to that of a Bank of Scotland affiliate. The Bank of Scotland itself joined the broader Lloyds Banking Group in 1999.
What is a Further Advance?
A supplementary loan that can be obtained on top of a current mortgage is referred to as a further advance, second charge mortgage, or second mortgage. Homeowners can borrow more funds using the capital they have accrued in their property. However the amount the individual can borrow will depend on multiple factors, such as the property's current Loan To Value, Birmingham Midshires stress tests and the property's rental income itself.
In order to obtain more money for a variety of purposes, such as improvements to their homes, debt relief, or other personal costs, homeowners sometimes employ further advances. It enables property owners to borrow money against the market value of their home without having to refinance or settle an existing mortgage.
Further advances are regarded as a second charge against the property. This indicates that the old mortgage is still in existence, but that the new loan has its own conditions and restrictions. If there is a default, the lender of the subsequent advance has second priority when it comes to repayment.
The amount that may be obtained through a further advance is based on a number of variables, including the equity in the collateral and the lending requirements. The terms of repayment are subject to change and may differ from those of the initial mortgage. Depending on the policies of the lender, the additional advance may be returned either concurrently with the current loan or on an independent repayment schedule.
The products available with Birmingham Midshires for a Further Advance are tailored to each individual mortgage account and therefore it is best to speak with an adviser who can look at the rates and options for you.
Assessment of affordability: Lenders often evaluate the borrower's capacity to repay the additional advance based on aspects like income, current financial obligations, and creditworthiness. They could take into account the borrower's general financial status as well as any modifications made since the initial mortgage was arranged.
Financial repercussions: Taking out another advance lengthens the total amount of debt that is secured against the property. Before moving forward with a further advance, it's crucial to take the effect on the monthly payments and any prospective long-term charges into account.
Hazards and factors to consider: It is advisable to carefully consider the conditions, interest rates, costs, and any hazards connected with a further loan. Ask a mortgage specialist or financial adviser for professional guidance to determine whether an additional advance is the best course of action for your particular situation.
Can I get a further advance on my Birmingham Midshires residential mortgage?
Unfortunately Birmingham Midshires are no longer a regulated lender and therefore cannot provide mortgage products for residential mortgages. If you have a residential mortgage with Birmingham Midshires you will need to remortgage away to a different lender and take out additional borrowing during the remortgage. If you want to do this, it is best to speak with a mortgage broker who can advise you properly on the process and can also compare across the whole of the market to ensure you get the best deal.
Who do I contact to arrange a Further Advance?
Due to BM now being an unregulated lender, if you want to arrange a Birmingham Midshires Further Advance you will need to contact someone independent who is able to place business with Birmingham Midshires. This can be a mortgage broker or financial adviser.
You will need to provide them with your Birmingham Midshires mortgage account number for them to be able to look at your options available and advise you on the best procedure. You can find your Birmingham Midshires account number on any documentation that the lender has sent you and it will also be the reference on your bank statements on your monthly direct debit that you pay for the monthly mortgage repayments.
How much can I borrow?
This will depend on a number of factors.
- Loan To Value. Birmingham Midshires will only lend up to a maximum of 75% of the property's value. Therefore if you have a property that is valued with Birmingham Midshires at £200,000 and you currently have a mortgage of £125,000, you will only be able to borrow up to £25,000 additional to the current mortgage to ensure the Loan To Value doesn't exceed £150,000.
- Rental Income. The property's annual rental income will be used in the stress test which determines, alongside the Loan To Value, the maximum loan available. The higher the rental income the property receives the higher the maximum loan available.
- Stress Tests. Just like all other lenders Birmingham Midshires have their own stress test calculations that will be done on the property's annual rental income. As these can fluctuate with the market, the difficulty in passing the stress tests fluctuates too as it goes off not only the mortgage market as a whole but the current interest rates that are on offer for a Birmingham Midshires Further Advance.
Will I need to go through underwriting for a Further Advance?
Unfortunately the process is getting a further advance isn't a quick and simple as the process of doing a Birmingham Midshires Rate Switch. However, the good news is that it isn't as extensive as it may be for a brand new mortgage or remortgage.
Birmingham Midshires will likely require up to date details of employment and also to see a copy of the property's tenancy agreement or AST. As long as the additional loan requested meets the Loan To Value limits for the product selected and the applicant can provide the tenancy agreement evidence the Further Advance should be obtainable.