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Phil3822 · 06-11-2009, 7:19 PM

Hi all, not really sure if this is the correct board. I've been in my home for 6 months and was a 1st time buyer. I brought with a LTV of 75% in Feb of this year and am due to remortgage in Feb 2012. I have some money saved away just in case I cant get a good deal, rates go sky high or the value of my home goes down.

At present I have storage heaters and want gas central heating but doing this would mean spending 5k + which is half of my saved amount.

I feel doing this would leave me vulnarable if I could not remortgage.

What I wish to know is when I remortgage do lenders send out a valuer to look at the house or do they base it on market value?
If I have gas central heating installed would it increase my value thus creating a better loan to value and minimising the risk of spening my savings.

Hope this all makes sense, i'm very paraniod as because of money troubles in the past my current mortgage deal is 10.7%. I really want to do all possible to ensure I can get a reasonable deal in 2012 and as such am cautious spending money.

Thanks

TEDDYRUKSPIN · 06-11-2009, 7:23 PM

Central heating will only affect the sale of the house value. If you know what I mean. It will mean if you sold it via an estate agent, it will sell more.

Now for banking and surveyor terms - especially on remortgage terms, this will not matter. Most or all companies carry out a specific online market value. They will sometimes do a quick drive-by too.

Phil3822 · 06-11-2009, 7:26 PM

Thats helpful Teddy, as a first time buyer I've not gone through the process of remortgage so was unsure. For some reason I thought any new company would send out someone to value the property. I have no plan on selling my home for a fair few years.

TEDDYRUKSPIN · 06-11-2009, 7:27 PM

You have until 2012. Would not worry about it.

Phil3822 · 06-11-2009, 7:33 PM

How do you mean not worry? As in get the gas central heating now and worry bout the mortgage later?

dimbo61 · 07-11-2009, 7:52 AM

Hi Phil3822
You have to make the decision on getting central heating or not!
Now a new gas central heating system will make your house warmer and if you do get a new boiler go for a worcester bosch ( check Which mag for best buys)
But this will use up half your savings
Are you really paying 10.7% on your mortgage ? Can you overpay ?
Try and build up your savings !
You could carry on using the storage heaters this winter and see how much it costs to heat your home.
Have a look and see if you can get a grant towards new GREENER gas central heating and better insulation.
Try not to fall for the idea that putting in a new kitchen or bathroom will add value to a property in the current market ! Better to overpay the mortgage and reduce your debts GOOD LUCK

Phil3822 · 07-11-2009, 9:14 AM

Thanks dimbo your advice is helpful. I have overpaid by £400 in the last 6 months so not much. I can overpay by £1000 a month without charge. At present I have around £300 spare per month which is being saved but that amount will stop next march. Currently on temporary promotion hence the extra pay. Yeah, 10.7% with platform. Had an IVA a few years back. My credit rating will be fully clear in 2 years with all defaults and IVA off.

I really appreciate your comment reminding me not to fall for the idea of putting in new kitchen etc to add value to the property. I think I was starting to fall for that trap however only in the remortgage value sense as I dont intend to sell for many years.

When a new lender values my home will they check if I have a gas connection and reflect that in the value?

The house could do with kitchen, bathroom and heating done however I can live with what we have. Its just dated.

opinions4u · 07-11-2009, 9:26 AM

Quote:

Originally Posted by Phil3822

When a new lender values my home will they check if I have a gas connection and reflect that in the value?

They should do, but the big question for me is "how much does a GCH system add to the value of a typical property?".

Very often a £5k spend will increase comfort and warmth significantly, potentially reduce bills (although not always) but only add £1k to £2k to value.

In the great scheme of things it's not significant.

getmore4less · 07-11-2009, 9:45 AM

Whats the follow on rate?

This is critical to the desition making process since it is the default do nothing option.

Phil3822 · 07-11-2009, 4:13 PM

opinions4u, thanks for your coments. Only a £1k is pretty poor so may be better keeping the money in the bank.

getmore4less, if I get you correctly. The follow on rate is a tracker of 3.65% above LIBOR but not below 6.65%.

Do you mean "default do nothing option" being that if I cant remortgage then my option is keep with platform after the 3 year deal finishes.

I'm finding the advice really helpful and am slowly making sense in order to come to an informed decision.

dimbo61 · 08-11-2009, 3:45 AM

Electric storage heaters tend to use alot of electric so high electric bills!
Now a new green combi boiler and new radiators will add value and save you money on your heating bills BUT may take 5/10 years to recoup the costs.
If you dont have any more money problems you may in 3 years time be able to get a cheaper deal with a main high street lender.
So make sure you pay the mortgage and dont overspend on improvements!
GOOD LUCK

Phil3822 · 08-11-2009, 9:15 AM

Thanks again dimbo, hopefully will be able to get a better deal when this one ends. Because of my past I live in fear regarding money and as such ask for advice on how best to move forward.

Mostly based on the advice here, I think i will keep my money saved away and only improve things that need improving ie break. I'll then re assess in 2012 depending on what type of deal I can get. Just hope rates are not up to 10% by 2012!!!