Borrowing more on the mortgage

john4012

Hi

I'm currently 2 years into a 5 year fixed mortgage and I'm wanting to borrow an extra 50,000 to add an extension to the property. I will also be using 50,000 of my own savings and expect the property value to go up by 150,000 which would bring my ltv to around 40%

My question is what's my best course of action? Do I approach my current lender to ask for a raise in the loan and see if they can do anything or will I be expected pay an early redemption charge to come out of the mortgage and then I will need to reapply for a new mortgage?

Any advice would be much appreciated

Regards

John

Thrugelmir

Rewind first.

What's the current property value and outstanding mortgage on it?

TrickyDicky101

Assuming you have sufficient free equity within the property currently, your existing lender may be prepared to offer you a further advance at the rate of its current products.

Do you have sufficient equity? This is based on what the property is worth now not when the extension is complete. What is current mortgage/house value?

john4012

Hi thanks for the quick responses, the property was bought for 355,000 with a 150,000 deposit.

MLSY

As long as affordability is ok existing lender should be able to offer an advance .

getmore4less

£205 on £355 58% LTV
£255 on £355 72% LTV
£255 on £505 50% LTV

dimbo61

Stamp duty goes up at £500K so if the extension does add the value you expect then £500K is the best you can hope for.
Does your income support a £255K mortgage ?Your lender will want to see plans, planning permission etc.
You can look on your lenders website at existing customers borrowing more money for the rates and deals they offer.
Now you already have a £205K mortgage and are asking for another £50K so you need to look if you are better off staying with your current lender or paying the ERC to get a new deal with another lender!

kingstreet

john4012 wrote: »

I'm wanting to borrow an extra 50,000 to add an extension to the property. My question is what's my best course of action?

Ask your current lender about additional borrowing, which will leave your current mortgage unaffected.

A second charge loan from another lender may also be considered, but you will find the rate is higher than that for additional borrowing from your existing first charge holder.

Success will depend on affordability and current LTV, not on future value.