Increasing Mortgage confusion

povuk

I am at the end of my deal and I am looking to increase my mortgage but because i am at 85% I can't.

Currently I owe 110k and my house is work 127k

I am wanting to put a extension which will cost me 15k. My guess is this will revalue my property to around £138k

My plan is to fund this myself and claim back from a new product.

Given this new value I would like to take a new mortgage out at 90% (124k)

However my current and even a new company will not do it, because my existing mortgage is £110k and anything else is additional borrowing, and they wont do that above 80% LTV.

But if I were to buy a £138k property on 90% new deal they would lend me the money?!

They talk about responsible borrowing, here I am trying to improve my house, and go about responsibly and I get rejected, but they did say on our joint income, I could buy a new property of up £180k!

Can someone please explain this nonsense!!!!!!

Thrugelmir

A lender will advance money on completed works not projected value.

There's no guarantee that the works will be completed nor add the projected value either. The property market could even fall in the meantime.

So you need to fund the works yourself.

witchy1066

I don't think its personal but if everyone did what you wanted to do wouldn't the money available for lending be tied up with those already on the property ladder, thus leaving less funds available for those wanting to get on or move up the ladder , if people didn't sell the market would become stagnant with less houses available but if you were to sell and bought a better one and the house you bought the sellers moved to a bigger home or even a smaller home the market keeps moving

I might be completely off the ball here but that's my thoughts

opinions4u

witchy1066 wrote: »

if everyone did what you wanted to do wouldn't the money available for lending be tied up with those already on the property ladder

Home improvement loans make up less than 5% of new mortgage lending.

thus leaving less funds available for those wanting to get on or move up the ladder

Lenders typically require more equity for home improvement lending. In many cases it's easier for first time buyers to get on the ladder with a 10% deposit than it is for somebody in the OP's position.

if people didn't sell the market would become stagnant with less houses available but if you were to sell and bought a better one and the house you bought the sellers moved to a bigger home or even a smaller home the market keeps moving

There's no shortage of property. People have choices in life. If you need a bigger property you have the choice to extend or move. Neither option is wrong or unfair.

A £15k extension may be better than moving to a property that's £20k more expensive and incurring estate agent fees, stamp duty and a stack of other costs.

fiesta04

Why would you want to pay £15k and only make the property worth £11k more. o4u has already asked same question.

F4