"when finished basis"

neneromanova

Hi, I'm looking around at remortgaging our house. Ideally, if possible, we'd like to spend £30k on so home improvements which would raise the value of the house, but don't have £30k to spare. I was just wondering if mortgage companies still do "when finished basis"? OH earns 45k so its not like we couldn't afford the repayments (would ideally like £170k mortgage)

Or are my dreams not going to happen this way?

jimmy_81

I'm no expert, maybe some of the mortgage guys on here know different... But I did ask this question of our broker when we were looking (FTB, just exchanged on a place!) - and his answer was "No chance - lenders don't do that these days..."

Sorry.

Building_Surveyor

Think remortgaging may be different. May all depend on whether u have equity in the property or not, along with a whole host of other stuff. Are you talking about releasing equity?

neneromanova

We have £25k worth of equity (what we've paid into the house) but if we were to sell it tomorrow we could sell it for £180k and only have a mortgage of £140k so technically £40k equity, but I'm guessing mortgage lenders wouldn't look at it that way due to the times.

kingstreet

Lenders only lend on the current value.

You'd have to raise the money another way, do the work, then remortgage to raise the money on the improved value.

neneromanova

kingstreet wrote: »

Lenders only lend on the current value.

You'd have to raise the money another way, do the work, then remortgage to raise the money on the improved value.

Ah, right, so if we borrowed the money from bank of mum and dad or something (robbed a bank :rotfl: ) we could then use the new valuation of the house (hopefully £210000) to remortgage to pay the old mortgage off plus pay the rents back?

That sounds like an idea if its possible.

Another question though, how stingy are lenders at the mo with self employed people if they have 3+ years of accounts to back up what they earn?

kingstreet

Fine. Three years SA302s to verify income and they'll take the latest year for affordability purposes if it's increasing year on year.

If it's static, or up and down, they'll use an average instead.

neneromanova

If I could kiss you I would thank you so much for your help. That's why I love these forums

dimbo61

So 3 kids under 5 , OH income of £45K ! You are self employed and earn £XXXX each year with accounts.
£30/40K equity and want mortgage of £170K

Thrugelmir

neneromanova wrote: »

Ah, right, so if we borrowed the money from bank of mum and dad or something (robbed a bank :rotfl: ) we could then use the new valuation of the house (hopefully £210000) to remortgage to pay the old mortgage off plus pay the rents back?

If you can afford a larger mortgage then start overpaying now. Build up the available equity to drawdown, which will fund the improvements. Merely increasing the size of your mortgage may leave you exposed if interest rates were to rise significantly in the future.

notanewuser

£30k worth of improvements might not actually increase the value of the house.

What are you planning to do?