Remortgage and taking more cash

superdon

So we plan to remortgage to a new lender in a few weeks. We had planned to take around £5k above what we owe on the current mortgage to do a few home improvements which will help the value of the house (new roof, repointing and some redecoration).

We actually have about 5k sitting in premium bonds at the moment. This is our safety net savings.

The question is. If we have all the work done now and spend that 5k before the remortgage, will it be a problem taking that during the remortgage to put back into savings and get the safety net back?

Hope that makes sense.

superdon

Anyone know if the new lender (probably TSB) will be happy to provide the extra cash on this basis?

Contemptuous

No, TSB wouldn't be willing to lend extra money to replenish savings. They would, however, happily lend the £5k you're looking for to use on home improvements.

amnblog

This is not a problem, state the purpose of the extra funds as home improvements, not investment, to avoid any confusion.

superdon

amnblog wrote: »

This is not a problem, state the purpose of the extra funds as home improvements, not investment, to avoid any confusion.

Ok so the plan would work ok? Seems to conflict against the advice above! I guess as long as I say its for home improvements rather than to go into savings that will be ok?

amnblog

You need to take your choice on the advice given on this forum.

Not everyone can be right.

superdon

amnblog wrote: »

You need to take your choice on the advice given on this forum.

Not everyone can be right.

Understood

Are TSB likely to ask for more info on the home improvements? Quotes etc? I know I need to be honest throughout the application but if I am asked for more info how do I deal with it? Do I explain I already had the work done and the extra money is to pay for it.

termhero

Hello, I remortgaged 18 months ago to the sum of £45,000 extra for home improvements with C & G (who provide for TSB I believe) and didn't have to provide anything.

I did have plenty of equity and excellent credit rating though, I'm not aware of your circumstances.

dimbo61

Things have changed and now we have MMR
This is where the lenders now ask how much you pay for a HAIR CUT!!
So if you do have lots of equity and good LTV, income etc then NO PROBLEM.
However if you have debts, In your overdraft every month, low income or lots of dependants then they may ask why you want the extra

superdon

Affordability and LTV should be no problem. The question was about the circumstances of spending the money now on the house and then getting the cash back at remortgage. Just wanted to know how to play that.

Thrugelmir

If you are debt free shouldn't be an issue. Lenders are likely to be more wary if you have unsecured debts. Therefore questioning in their minds the true purpose of the equity withdrawl.