Remortgage query

HenryandHetti

Hi

I wonder whether you could please give me some advise with regards to getting ready to remortgage with extra borrowing.

We are on a current deal with Accord – 2 years variable 4.09%
85% ltv on a purchase price of 250000 and mortgage was £210k
Mortgage of £199k by the May 2014 with overpayments and standard repayments

When this finishes in May 2014, we would be looking to borrow approx 60k extra to fund a single story extension, new kitchen and bathroom. Based on the other properties on our street who have completed the same type of extension, its estimated that the property would then be worth £290k (300k at the very max)

I’ve never been in this position before and am unsure whether we will have enough equity in the property in order to release 60K?
With regards to the remortgage, would there be any lenders who will lend the extra based on the final price ltv when the works are complete?

Thanks

Thrugelmir

Any further advance will be based on the current value of your property not it's potential future value. At the current there's insufficient equity to fund your proposal.

The only way forward is to overpay the mortgage by the maximum you can. Including making sacrifices now to reduce your expenditure.

kingstreet

HenryandHetti wrote: »

With regards to the remortgage, would there be any lenders who will lend the extra based on the final price ltv when the works are complete?

No. You'll need to fund it yourselves, then remortgage after the work is complete and the increased value reflected therein.

HenryandHetti

Thank you for the replies. I'd best get the piggy bank filled up then!

Would another option be to remortgage to a lower LTV - i.e. 90% and release some funds towards it that way?

Thanks