First time buyer / remortgage

techmob

Hi

We bought a property for 82000 in December 2010 and we are on a fixed ate mortgage until December 2012

Apparently the house was on the Market for 100000 and we managed to get it for 82000, it was a repo

Te house did not have central heating which we have put in, we have done other renovations such as all new electrics, new modern stairs, new doors and architrave, new lights and fittings, new bathroom, new plaster boarded and plastered Walls. Have completely done the back garden which was a mess and have put a new fence up

Basically I feel we have added value to the property but I have no idea how much or if house prices have gone up or down since buying

This is my first mortgage so I am far from an expert but I was thinking about remortgaging when my 2 year fixed period is up but I am not entirely sure how it works for example

If I have added value to the house do. Have to pay to get it valued so I have an idea what it is worth?

What happens if the property is valued higher than we got a mortgage for?

Does that money become free again?

kingstreet

When your current deal ends, you can go back to your existing lender and ask for a new one, a customer retention product, or you can look to remortgage to a new lender. A solicitor gets the money from the new lender and pays off the old one.

I presume when you bought the property, you put down a deposit? When you own the property, that deposit becomes the equity, the bit of the property you actually own.

If you do something to increase the value of the property, the value of your equity increases. If you remortgage, the equity determines how good a mortgage rate you get.

If you see a mortgage product for a loan to value of no more than 75%, this means your equity has to be 25% or more. So a property worth £100k can be remortgaged for £75k and you can get a rate for a loan to value of 75% because your equity is £25k, or 25%.

Lenders often offer remortgage products with no fees to transfer to them, so you don't pay the kind of costs you paid when you bought the property. The lender will have the property valued by a surveyor and transferred by a solicitor, at its expense.

techmob

thanks for that...