The most common way to increase an existing home loan amount is to apply for a top-up loan. Keep in mind that a lender will ask several questions and require an application from your client. Brokers can help their clients by preparing them for the application.
A top-up loan depends on the equity accrued by the property. The home’s equity becomes the collateral against the loan, so there needs to be enough. Plus, the lender assesses the client’s ability to repay the additional funds.
Top-up loans are funds allocated to a client on top of their existing mortgage. The assumption is that the client requires the funds for home improvements. Although lenders allow clients to use the top-up funds to purchase a vehicle or pay for a child’s higher education too.
Lenders will ask clients why they require the additional funds. They’re trying to figure out why the client is requesting additional debt. Clients who maintain a good relationship with the lender can procure the top-up loan without too much trouble. As long as they demonstrate the ability to repay the funds and their existing mortgage, it’s financing that goes through more easily.
In some cases, a different financial product makes more sense. Loan specialists at Mortgage Street receive access to innovative tools that efficiently assess a client’s application. Depending on the client’s financial goals, refinancing the mortgage or obtaining a home equity line of credit may make more fiscal sense.
Increase Existing Home Loan Conclusion
To increase the amount of an existing home loan, clients will apply for additional financing. They’ll also speak with the lender. The goal is to find out the purpose of the extra funding. Mortgage Street offers top-up loans, but there are other options to consider. To receive more information, contact our loan specialists.