First Time remortgaging

neneromanova

sounds a strange stupid question, but when you remortgage, how does the old mortgage get paid off? does the new mortgage company go straight to them, or does the money come to you and you pay it off?

Also, we're looking to improve the house (new extension) say it was to cost £40k and we borrowed that £40k from parents, and we have a mortgage of £140k and the house is worth £225k, how would we pay the parents back the money we borrowed? or is that not possible? Would we just take out a mortgage for £180k and tell them who to pay? If it makes any difference, my parents don't actually have £40k, it would be borrowed from their equity then repaid (if that makes sense)

kingstreet

Money goes via solicitors, as it does when you buy.

You simply borrow more than you need, the solicitor pays off the mortgage and pays to you, or whoever you nominate, the remainder.

Be careful with extentions. Lenders only lend on the completed property valuation, so you'll need to have it finished and a surveyor inspect it before you'll be able to borrow into the revised valuation.

amnblog

the money goes to a solicitor who pays off the previous mortgage company and puts the 'charge' in place on the property for the new mortgage company.

If there is surplus, in your case £40,000, that remains in the solicitors account from which they can transfer it out to you to repay your folks.

neneromanova

Really? A solicitors has to get involved?! So when you remortgage, do you have to go to a solicitors and pay them a couple £100's just to remortgage? Or is this done via the mortgage companies solicitors?

kingstreet wrote: »

Be careful with extentions. Lenders only lend on the completed property valuation, so you'll need to have it finished and a surveyor inspect it before you'll be able to borrow into the revised valuation.

Yeah that's why we were going to borrow the money first then remortgage, (just seeing if it was possible first) otherwise we'd just go straight to remortgaging

So how do I remortgage? Is there like an idiots guide to doing it?

amnblog

most lenders offering the new deal will pay for that cost.

neneromanova

amnblog wrote: »

most lenders offering the new deal will pay for that cost.

Ah, Phew. That's ok then Thanks. So when applying to remortgage, I'm guessing we have to be upfront with the mortgage company and say it's X amount to this company and Y amount to my parents?

amnblog

yes, that should not be a problem, subject to the lenders maximum limits for capital raising, which you appear to be clear on