Remortgage advice please.

handag

Hi all, I'm hoping you lovely people can help me out!
Our current situation - we own our home outright value of £160,000 (it's worth a bit more but would rather under estimate ).
We will shortly be building a new home, total cost of build and furnishing is £195,000.
What do you guys think is the best solution? We are finding it very difficult to find a bank to give us a self build mortgage because it has an agricultural clause on it.
We were thinking of remortgaging our current home to get the build up an possibly get a loan afterwards to complete the build.
Any help would be most appreciated. Please let me know if you need anymore info. X

kingstreet

What happens to property one when property two is built?

If you plan to let it, you could remortgage it using a buy to let product, upto 75% of the value.

The rental income would need to be 125% of the monthly mortgage interest, assuming a rate of 6%pa.

You may get a residential mortgage on it, but the questions about use of funds may be a bit more pointed if you go that route.

handag

Sorry I forgot to add we will be selling it so will have to pay off the remortgage.

Any recommendations on what banks are doing the best rates and low final repayment charges!

kingstreet

Nope. That's potentially viewed as advice.

Either carry out your own research or contact a local broker.

GMS

Be very careful with the agricultural restriction. Even if you built the place with cash you may find it difficult to refinance or sell in the future.

Thrugelmir

handag wrote: »

Sorry I forgot to add we will be selling it so will have to pay off the remortgage.

Any recommendations on what banks are doing the best rates and low final repayment charges!

Your issue is finding any lender who will interested in financing the project.

Perhaps better to sell yours and live on site in a caravan.