Unencumbered property is when you own a property outright with no mortgage or loans secured against it.
Yes. The type of mortgage you would get would depend on whether you live in the property (a home-owner mortgage) or rent it out (a buy to let mortgage). The mortgage would allow you to raise capital in order to make your next purchase either in its entirety or just a deposit. If you borrow just enough to raise a deposit for a buy to let mortgage on the new property remember you will need at least 15% of the purchase price although 25% will give you more options. As a rule of thumb, the greater the deposit, the better rate you can expect to achieve.