increasing a mortgage

jw2003

Hi, I recently saw that you could increase your mortgage mid-term. Our bank's website doesn't have much information on it so was wondering if anyone here knew a bit more about it.

We've a decent portion of equity in our home and would like to increase our mortgage from £83k to £108k. I don't know the exact value of our house, they go on the market for about £145k-ish so maybe would need to reduce the extra borrowings a little to remain within the ltv 75% bracket - would this still apply if we borrow extra?

Our current rate is 6.7% so would it be better just to remortgage when our current deal ends in February for the full (or maximum available) amount

The extra borrowing will be used to fund a garage and fourth bedroom

Thanks in advance

dimbo61

You need to talk to your lender about there rules on extra borrowing.
You could also get an idea from there website but dont forget they are also much more carefull in todays market ( income )

georgehere

I have done this in the past for added rooms and it is very straightforward. Just think of it as applying for a mortgage of the amount you want .... it is as simple as that.
If you are a 'good' risk, the mortgage co will not care that much what you are going to spend the money on as long as they think you can afford it. They are not going to come round and check you did the extension.
So, ask them ... but also ask around if you have good history and you think that interest rates will not go up too much between now and Feb then you could go to a new co and maybe get a better rate.

The thing I am not sure about but seems worth an ask of an expert is if you could go to a new co now for the extra and get a better rate than 6.7 .... then in Feb put the rest with the same co which takes out some of the risk of waiting.

The more complicated thought is how much would it cost to get out of your 6.7 deal early (now) and switch to a better rate but maybe pay a penalty.

jw2003

Thanks for your responses, to switch completely early would cost about £2000 so I don't fancy that much but I'll hold off another couple of months anyway, we've not even gone to the planners yet, and speak to the bank direct. I just wanted to see if anyone knew more than their website was letting on

Thanks again