Remortgaging & Borrowing More Help.

Nifty_Thrifty

Hi,

We are currently living in a 3 bedroom detached house but are looking to add an upstairs extension which will turn the house into a 4 bed with en-suite.

We are due to remortgage early next year so will be looking into mortgages later in the year. Our figures will look something like the following:-

Owe £160k
House Value £225k
LTV 71%

We would like to borrow approximately £30k to complete the extension so when we remortgage we will be looking to borrow approximately £190k. This will mean the following figures

Looking to borrow £190k
House Value £225k
LTV 84%

BUT, Obviously when we do the extension the house will be worth approx £250k so

Owe £190k
House Value £250k
LTV 76%

I guess what i'm asking is when we look to borrow the extra £30k will we not be able to get the better rates of less than 75% LTV or will they take into account what the extra £30k is being borrowed for??

Sorry for the long post.

catwoman73

They won't take into account the increase in property value after the work has been done, partly because they have no way of forcing you to spend the extra money on that purpose. You could tell them that it is for the extension but then spend it on a world cruise for all they know.

What is your credit rating and disposable income like? Could you borrow some of the money as a remortgage to keep below 80% or whatever entitles you to the good rate and then get a personal loan for the rest (or save up if you aren't in a rush for the extension)?

Nifty_Thrifty

catwoman73 wrote: »

They won't take into account the increase in property value after the work has been done, partly because they have no way of forcing you to spend the extra money on that purpose. You could tell them that it is for the extension but then spend it on a world cruise for all they know.

What is your credit rating and disposable income like? Could you borrow some of the money as a remortgage to keep below 80% or whatever entitles you to the good rate and then get a personal loan for the rest (or save up if you aren't in a rush for the extension)?

Hi Catwoman, thanks for the reply. I thought that maybe the answer.

Our credit rating is very good, our disposable income will be £230 per month better off next February when a current personal loan ends. I think the best thing may be to borrow up to 80% and get any balance need through a personal loan.

We do want this extension doing next spring as we have 3 boys who are currently 9,7 & nearly 2 so want them to have their own bedrooms before the oldest 2 start secondary school. Also my father-in-law is a builder in his early sixties and he will help with a lot of the building work so we need this doing before he retires.