Halifax product transfer and borrow more- advice needed please!

bailey2658

Hi after a bit of advice,

our current fixed rate mortgage with Halifax finishes soon and we would really like to do a product transfer but also borrow more and change the length of the mortgage - we took out the mortgage 2 years ago at a very high rate of 6.29% over 35 years with a 90% ltv (we didn't have many options at the time as we had another property as well - which we have now sold).

I'm aware that to borrow more and change terms etc. we need to phone up rather than apply online but I just wanted to see what peoples opinions were before I ring up and tie myself up in knots answering questions!

Basically our house has gone up in value 30k in last 2 years according to Halifax's own house price calculator, although comparable houses on our street are selling for even more than that. We are also in a much better financial situation now having sold our other property and my husband now earns more so we would obviously like to reduce the term of our mortgage so we are paying less interest.

We would like to borrow at 90% ltv again over just 25 years (so 10 years less than current mortgage) and fix in for another 4 years but we should now be able to get a much better rate of around 4%, which would release around 25k to do an extension to our house.
Has anyone recently done a product transfer and borrowed more from Halifax at the same time?

My worry is that we will now face the tough MMR requirements and although we earn jointly in excess of 90k we also have childcare costs etc. that weren't taken into account 2 years ago!

Also just to add an extra difficulty I am 3 months pregnant and I'm unsure whether or not to just keep this quiet at application stage due to the impact it may have on how much they will lend us, do Halifax outright ask you about things like pregnancy? We can definitely afford the repayments whilst I'm on maternity leave and I plan to return to work full time.

If we did apply for a new mortgage with them and ended up getting turned down what would happen? would we still just go onto their SVR anyway at the end of our fixed rate? I assume they can't withdraw our existing mortgage? But I don't know what effect it has on your credit rating if you've been turned down for a mortgage.

Thanks for any help or advice you can give! sorry for rambling!

kingstreet

AFAIK Halifax won't go above 80% for additional borrowing.

bailey2658

Hi thanks for your reply, I knew that was the rule for additional borrowing but wasnt sure it was classed as additional borrowing if we are moving the whole mortgage onto a new rate? We wont be in our fixed term anymore.

If that's the case looks like we will have to re-mortgage elsewhere.

Anybody know which lenders will loan at 90% ltv for capital raising purposes?

amnblog

What are you raising the capital for?

bailey2658

to do an extension on our existing property.

amnblog

I know of only one lender that would do this.


Your risk of course is that the valuation will not be as ambitious as you need it to be.

kingstreet

If you are an existing borrower and you want to raise extra money, that's additional borrowing. Your existing and new borrowing cannot exceed 80% of the current property value.

The fact that you are changing products isn't relevant.

kingstreet

The maximum amount you can borrow in total, with your existing mortgage and additional borrowing, is 80% of the value of your property on a repayment basis.

http://www.halifax.co.uk/mortgages/existing-customers/additional-borrowing/

See FAQ - How much could I borrow?

bailey2658

Thanks for all the responses, so not looking good for raising the money then! We bought the house for £250k 2 years ago but we got it for a knock down price at the time, according to halifax house price calculator it's now worth £280k, although very similar houses on our street have sold for over £300k this year, however I'm not unrealistic and only wanted it to be worth £270k so that we would release around £20k.

Maybe what we want to do isn't achievable then, I thought there would be more than one lender who would so 90% ltv for capital raising purposes.

bailey2658

Just another thought/ query, if I could fund the work to the house by borrowing off family, could I then remortgage the house afterwards (which I estimate will be worth in excess of 300k) so that I could release capital to repay the family member back? Or do you have I justify why you want to raise capital and do they check that you use it for that reason, in that scenario we would only need to borrow around 80% ltv so may be more lenders available? Any help welcome thanks!

GoneWithTheWindFabulous

Hi I thought Halifax counted extra borrowing to be on a separate interest rate

http://www.halifax.co.uk/mortgages/existing-customers/additional-borrowing/

Edit - Do you have planning permission for home improvements?