Remortgage to get extension

bowf

Our current fixed rate deal runs out next month and we would like to release equity to extend the kitchen/dining room and get the driveway done.
Some rough figures are as follows.

Property value approx £125000
Amount of mortgage £80000,(split between interest only endowment of £63000 and the balance on capital and interest.)

We would like to release around £20K-£25K to get the extension and driveway done.

My questions are

1/Is a remortgage to release equity easily done ?
2/At what point to you actually get the cash,and do you get it in one lump sum ?
3/Do the lenders base your value to loan percentage on what the house is worth now,or what it will be worth when finished ?

Basically,I'm a wee bit worried that we will have to 'stump up' money ourselves at some point,which I don't want to do.I want to use the lender's money all the way along the line !

We're currently paying around £485 per month on a loan of £80K,which I think is expensive.What sort of payments would we be looking at for around £110K ?
I like fixed rates,but I like the idea of (small) overpayments to get it finished.

So many questions.....sorry. :-[

payless

release equity

we all know what you mean - but remember its still additional borrowing

Most lenders give all the extra cash on completion of swap

Easier to value against currrent value- otherwise they might not release as above

bowf

Apologies,my terminology sucks !
Of course,it's additional borrowing.
A friend of mine,who is a bricklayer,reckons most builders require payment in a few stages of doing an extension.
When foundations are done
When it's wind and watertight
When it's done.

So,does the lender give you the whole additional borrowing in one lump sum for you to dish out,or do you approach them in stages and they 'tot it up' as you go along ?

Say I ask for 25K,for the sake of argument,and the building work only requires 21K. Is the additional 4K 'spare' or do you give it back to reduce the debt ?

You know,sometimes it seems easier to move but I reckon legal fees would cost me the guts of 5K,so I' loathe to do that !

payless

sorry if being petty

If you are borrowing less than 90% of current value- most lenders give it you when completes for you do use as required

Some many force stage payments but thats rare these days. Some may give you the option ( but usually these a fee/ higher rate)

Giving back will depend on the deal taken with the lender

Murphy_The_Cat

i can't really help on the mortgage side but in my experience take a builders quote/estimate/guess/downright lie and add 50% and you may get somewhere close to the final bill.

this may impact on your descision ;D

MTC

mortgagemike

Depending on your income you can get away with an 85% remortgage which would allow a loan of up to £106,250 based on a value of £125,000.

When you remortgage the full £106,250 is released to the solicitor who will use the proceeds to pay off your existing mortgage of £80,000 and forward the rest to you in full, in 1 hit (no stages). You can then do what you wish with the monies. However the lender will only lend based on the existing value of the property.

Depending on your income and age your monthly payment over 25 years would be circa £575 per month

beecher2

Why on earth would you dig up a thread from 6 years ago?