Remortgage or savings?

Hello I need a little advice as I'm confused!

My partner and I are wishing to carry out some alterations in the home to improve our living space as we have looked into moving but would be hard pushed to find a bigger house for what we can afford.
So we have had quotes for the work coming in at approx 12k.
What I need to know is do we:-

Remortgage (current fixed at 6.29% till Aug 2011) would the extra borrowing be at this rate or lower?

or

Use our savings approx 7k and get a loan for the difference? If so what sort of interest rates could we expect to pay?

Thanks Viv

Replies

  • dimbo61dimbo61 Forumite
    13.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Forumite
    You need to speak to your lender and ask!
    how much equity do you have in your home?
    How long have you lived there and how much deposit did you put down, how much of the mortgage have you paid off !
    Lots of things to take into account including can you afford the bigger mortgage!
  • VLTVLT Forumite
    326 Posts
    Part of the Furniture 100 Posts Combo Breaker
    Bought house for 92k in 2004 with a mortgage of 72k
    Valued approx 18 months ago at 135k although I am sure this would be less now.
    Mortgage currently 68K.
  • getmore4lessgetmore4less Forumite
    46.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Forumite
    Moving costs money so that is a saving/money to invest in the current place but how long will this keep you there?

    No point in doing it if you are still going to move in a year or two.

    With that LTV borrowing the money should not be too big a problem as long as the income multiple is OK.

    So what is the income and how big is the family?

    I would borrow a bit more than you need on a flexable deal so you can overpay if the building comes in on budget but you have contingency if you over run.

    Under funding is the big mistake people make since they then need to borrow more and lenders are not so keen to give out more money so soon.

    I would keep as much of the savings as you can as a long term contingency/emergency fund
  • Rob71Rob71 Forumite
    118 Posts
    Part of the Furniture Combo Breaker
    Forumite
    Have you thought about an equity release loan rather than remortgage? It amounts to the same thing (you're borrowing money against the value of your house), but the term would be shorter and you'd pay less interest in the long term.

    Just an idea...
This discussion has been closed.
Latest MSE News and Guides

Boost your Nectar points

Get up to £25 in bonus points

MSE News

Ask an Expert: Scams

Watch MSE Katie's answers to your questions

MSE Forum

Hot Diamonds 40% off code

Including already-reduced outlet stock

MSE Deals