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Home Improvements / Mortgage
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Graz279
Posts: 19 Forumite
We having an extension built on our house hopefully starting end of April, reason for the post is we're not quite sure of the best way to fund it.....
Our current mortgage reached the end of its tie-in period a few months back, our IFA was keen to sort us with a new deal at the time (wanted the commission I expect
) but in the end we agreed to hold on until we had a better idea of how much cash we needed for the extension. I spoke to the existing lender (Principality BS) and they agreed verbally that the should be able to lend us whatever we need for the work at their SVR (4.99%), what I forgot to ask it whether that ties us into anything further or once the work is done we can transfer the whole debt elsewhere. Assuming that were the case would we be better off getting the money from them, then once the work is complete get the house revalued and get a whole new (re)mortgage deal, or re-mortgage now to get the cash we need based on the current (or projected?) valuation.
We were at around 75% LTV when we bought the place just over two years ago so maybe a bit less than that now but it is a "project" house so we've been adding value as we've been renovating it. Therefore the re-mortgage now option to get the cash for the extension would be taking us up to 85-90% so not so many good deals available.
On the projected value after the extension is complete we'd probably still be at 75% LTV or less so would be able to get a better deal. We're also ploughing our savings into it so only need to borrow roughly half what the work will cost.
Help!
Cheers,
Graz
Our current mortgage reached the end of its tie-in period a few months back, our IFA was keen to sort us with a new deal at the time (wanted the commission I expect
) but in the end we agreed to hold on until we had a better idea of how much cash we needed for the extension. I spoke to the existing lender (Principality BS) and they agreed verbally that the should be able to lend us whatever we need for the work at their SVR (4.99%), what I forgot to ask it whether that ties us into anything further or once the work is done we can transfer the whole debt elsewhere. Assuming that were the case would we be better off getting the money from them, then once the work is complete get the house revalued and get a whole new (re)mortgage deal, or re-mortgage now to get the cash we need based on the current (or projected?) valuation.We were at around 75% LTV when we bought the place just over two years ago so maybe a bit less than that now but it is a "project" house so we've been adding value as we've been renovating it. Therefore the re-mortgage now option to get the cash for the extension would be taking us up to 85-90% so not so many good deals available.
On the projected value after the extension is complete we'd probably still be at 75% LTV or less so would be able to get a better deal. We're also ploughing our savings into it so only need to borrow roughly half what the work will cost.
Help!
Cheers,
Graz
0
Comments
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You need to get back to your lender and ask them the questions.
Borrowing at the SVR of 4.99% would be very good but make sure you are not tied in !
Make sure the work you do will add value0 -
Seems like the option of borrowing from our current lender would be best provided no tie-in. Looked at re-mortgages for 80-90% LTV and the rates are significantly higher than what we are currently paying.
Then when the work is complete re-value the house and seek out a new deal whilst hopefully maintaining the current 75% LTV or better
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