Should I be a MFW - advice needed!

Thrugelmir

museumworker wrote: »

This may seem like a silly question (I have only had a mortgage for 1 yr) - but how would the remortgaging work? We have early exit charges until 2012, and I would think arrangement and valuation fees would apply to remortgaging which could easy mount up to close to £1k. Given this, and the fact that I would then be paying interest on the borrowed amount, wouldn't it be better to pay for the loft up front with cash? The loft has to be done, as soon as we can afford it.

Also, might be an aside but should mention that we are limited to a 10% overpayment per year.

Yes please to saving lots of interest and reducing the term though - just need to work out whether mortgage repayments need to take a back seat or given more of a priority.

Thanks everyone for posting, please keep the comments coming!

Apologies if I wasn't clear. By remortgaging I meant get a second loan from your existing lender. Don't redeem your existing mortgage.

On the basis that you were currently saving around £300 for the building work. I assumed that it would be a couple of years away at least until it was done. So there was ample time to benefit from paying down the mortgage.

Overpaying by 10% is still over £19k per annum. So hardly limited!

Lofts rarely add value to houses above there actual cost. As they are an expensive way of adding space. So expecting an increase of £20k is on the optimistic side.

When dealing with money don't be sentimental. You can always buy more premium bonds in the future. Focus your energies on your goals. Not a dream of winning the jackpot!

SmlSave

Hi muse,

You can find the 4k challegne on the Deft Free Diaries page. I upped mine to 5k as I would have never managed 4k!

They are a lovely bunch

dimbo61

Your LTV is close to 85% so please be carefull and OP if you can while also building up funds to pay for loft conversion.
Decorating with new flock/woodchip wallpaper will only add value when you come to sell IF new buyer likes your taste!
Same with new kitchen/bathroom ( think drive by valuation)
Also consider the magic £250,000 figure and stamp duty
Sale price £249,999 stamp duty £2,499
Sale price £251,000 stamp duty £7,530
Adding a well built extra bedroom and en-suite will add value ( if its the right size) but DO YOU NEED THE SPACE and can you afford it!
10% overpayment is alot of money with a £198k mortgage GOOD LUCK

dimbo61

Think OP might struggle to get second loan from lender with LTV of 85%
in todays market.