FTB need advice on loan for home improvements

baggio_2

I am a first time buyer and need some advice regarding the home improvements that will be needed to my property.

I am in the process of taking out a mortgage with the Nationwide with a 2 year fixed rate. However, the property does need around £10,000 of works to upgrade it. I am thinking about taking out a flexiloan with the Natwest and just paying the interest rates until the works are completed and then adding the loan to the mortgage.

Is this feasible?, would I have to wait until the 2 year fixed rate priod was over before I could do this, or could I ask Nationwide to do a revaluaiton on the property after the works are done to allow me to add this amount to the mortgage.

Any advice would be appreciated.

_Andy_

Depending on the loan-to-value (LTV) they may well accept the loan as an equity release loan once work has been done. Will probably involve you paying for a basic valuation. Best to ring and check with them though.

regularsaver1

You will need to show affordability at both time for your existing credit commitments and new mortgage commitments

nationwide may charge a further advance fee when you borrow more against property, as well as the revaluation

baggio_2

Thanks for the reply - problem I had was that the property was a bit of bargain and needed mortgage quickly. However, will be have a very large pay rise at the end of the month so could get fixed rate loan for the £10,000 and probably be fairly okay with it but at the moment I would rather add it to my mortgage even though in the long term I will probably pay more in interest.

I don't think that equity should be a problem as there should be at least 30,000 in equity in the home once it is finished.

_Andy_

They'll probably take it on as an ERL..i.e. seperate to the mortgage..in which case just take it over a shorter term, if you're concerned about total interest charged.

regularsaver1

if you do the application now they will base the valuation on how it is now - unless they do a reserve, and revalue it later (should they need to)