looking to borrow money against our house

alexwhite1979

Earlier this year we bought our first house. It was the worst house on the best street and we have completley renivated the whole house from top to bottom and built a large kitchen extension. We paid 145k for our house and have a mortgage of 120k. The House is now worth around 210k.

We have quite a lot of debt and a baby due in April. We would like to convert the loft into a 3rd bedroom.

We are hoping to borrow 45k-50k against our house to pay off debt and build the 3rd bedroom.

Any advice would be appreciated.

dimbo61

The key question is what are other houses on the street selling for!
The computer might well say NO as your home was valued at £145 only one year ago.
Does a new kitchen extension and renovation add £65,000 tom the value ?
Only a valuation by a surveyor would give you that information

kingstreet

alexwhite1979 wrote: »

The House is now worth around 210k

Can you tell us how you arrived at this figure?

alexwhite1979

The average house price on the street would be 230k. Our house was in a bad way when bought it and had not been touched for over 30 years. Every wall has been re plasterd and decorated, new central heating, bathroom and large modern kitchen in the new extension. When we finish the 3rd bedroom with en suite I would like to think the house should be worth 230k-250k

Im going to have the house surveyed shortley.

kingstreet

alexwhite1979 wrote: »

I'm going to have the house surveyed shortly.

By whom?

Are you paying for a valuation by a chartered surveyor?

At the £170k on £210k you mention in your opening post, you are talking about an 81% mortgage, pretty much the same LTV as when you bought. If you apply to a new lender, they will send a surveyor to establish the value is what you put on the application. You can limit any wasted expense by applying to a lender offering a product with a free valuation.

I don't know if you'll be successful, but any reduction in the value would put a remortgage at risk as you would be close to, or even over the limit most lenders would offer, around 85%. Are your incomes sufficient to cover the increased mortgage? Any penalties on the current deal?

Worth bearing in mind, you shouldn't apply until you've owned the property for six months.

alexwhite1979

I come to the 210k figiure by the prices of houses that have sold on our street latley. I found out this information through zoopla.

kingstreet

alexwhite1979 wrote: »

I come to the 210k figiure by the prices of houses that have sold on our street latley. I found out this information through zoopla.

I wouldn't place too much reliance on that. A desktop valuation wouldn't really help you because of the amount of improvement work you've done, otherwise I'd suggest you use HomeTrack. Some of the things you've done will improve saleability without increasing value. The issue is whether a surveyor feels you've added almost half the original purchase price in less than a year on top of that.

alexwhite1979

Thanks for your help!

We were going to stay with NatWest and we can comftably afford the re payments for the new mortgage.

We have owned the property over 6 months.

kingstreet wrote: »

Can you tell us how you arrived at this figure?

kingstreet wrote: »

By whom?

Are you paying for a valuation by a chartered surveyor?

At the £170k on £210k you mention in your opening post, you are talking about an 81% mortgage, pretty much the same LTV as when you bought. If you apply to a new lender, they will send a surveyor to establish the value is what you put on the application. You can limit any wasted expense by applying to a lender offering a product with a free valuation.

I don't know if you'll be successful, but any reduction in the value would put a remortgage at risk as you would be close to, or even over the limit most lenders would offer, around 85%. Are your incomes sufficient to cover the increased mortgage? Any penalties on the current deal?

Worth bearing in mind, you shouldn't apply until you've owned the property for six months.

Wh05apk

Depending on your lender you may be able to get upto 85% of the current valuation, but with a further advance, you would need to pay for the valuation fee upfront, so make sure your figures are correct before commiting yourself.

kingstreet

Ok. Has NatWest quoted you for the further borrowing and carried out the status checks? What are they offering? What fees are involved? How much do you have to risk by applying?