Extra Funds Now Or Later

virgin_moneysaver

we're shortly moving house but don't need to advance any more monies as the differential between the two properties is only £3000 (in our favour) & we have only £9k owing on a £175k house - the house we are buying needs work including an extension but we won't be ready for the work until next year - do we apply for a mortgage which includes the funds for this work now, or do we just go with what we owe & apply for the extra at a later date - & would you advise a fixed or discounted rate?

herbiesjp

What you could do is apply for an offset mortgage - and draw down the funds. These funds you would then pay straight back into your offset account.

This way you pay no interest and have the funds ready to use as and when you need them - as you draw the funds you start paying the interest due on them.

If you were looking at this option you would be looking at discount/tracker rates - the rates will depend on the loan amount against the value of the property.

Scott

The offset option is ok if you're self controlled enough to leave the money there until you need it. I know I'd be tempted to nibble away at it.

Myself, I'd apply for an equity release at a later point.