Increasing borrowing when remortgaging (what is allowed)

SavingSteve

My current rate is due for expiry soon, so I will be remortgaging.

As a result of overpaying and increases in value I'm down to around 50% LTV so am able to take advantage of the best deals out there. Despite the fees involved the HSBC's 0.99% 2 year fix is what works best for me.

What I am looking to do is increase my borrowing so I'm up to just under 65% LTV. I'm sure HSBC will ask why I want to borrow more than the amount of the mortgage due to be paid off? I have a variety of reasons, and may borrow less if HSBC arent keen on my reasons.

Does anyone have any insight into which of the below HSBC would be OK with?

1) Refurbing Bathroom
2) Refurbing Kitchen
3) Buying a new car/s
4) A costly holiday
5) Investing in a buy to let (I doubt they'd lend for this)
6) Putting the money in a savings account earning >0.99% (I doubt they'd lend for this either!)

Thrugelmir

Is the additional money to clear other existing debts?

Joy_mate

I borrowed more when I have my flat remortgaged in May this year.
Indeed lender asked reason just to fill the form, but they would not bother about money what I am going to do.
The reason I gave to invest in another property.
As long as you can pass their affordibility test, they would not mind, what will you do with that money.
Also ur LTV is less, so less risk for them. My LTV was 75% with woolwich.

SavingSteve

Thrugelmir - No other debts, reasons are as noted above.

Thanks Joy_mate.

Does anyone have experience of HSBC in this scenario?

Joy_mate

Let me explained u whole process of remortgage I gone through this year may.
1. First I went to HSBC - I understood whole process of remortgaging with them. It was easy for me to get lower % rate but they refuse to provide me extra money which I wanted to borrowed, (it was not use affordibility)
2. After those hectic days I decided to check with broker, and he suggest woolwich to borrow extra money.
3. All set with woolwich. Got extra borrowed money (40k) in my Barclays current account. Now woolwich/Barclays has nothing to do with that money. It's my money and I can do anything I want with that monies.

ytfcmad

Did what you hope to do with HSBC (lower LTV's) for 2 of the same reasons on your list.

SavingSteve

ytfcmad - mind me asking which two?

minimike2

Joy_mate wrote: »

Indeed lender asked reason just to fill the form, but they would not bother about money what I am going to do.
The reason I gave to invest in another property.
As long as you can pass their affordibility test, they would not mind, what will you do with that money.

Joy_mate wrote: »

Now woolwich/Barclays has nothing to do with that money. It's my money and I can do anything I want with that monies.

I'm sorry but this is total nonsense.

Lenders DO care what you use the money for. Which is why they ask. Lenders have set policies on what they will and will not allow advancing of funds for and with good reason. If you lie to them on your application in order to circumvent their lending policies and this is later discovered then they can call in the loan. At the very least you would end up being placed onto the CIFAS register due to committing mortgage fraud.

If you do not fit a lenders criteria for allowable reasons for further borrowing then find a lender that allows what you want to do.

SavingSteve

minimike2 wrote: »

I'm sorry but this is total nonsense.
Lenders DO care what you use the money for. Which is why they ask. Lenders have set policies on what they will and will not allow advancing of funds for and with good reason.

Do you have any insights into what these may be for HSBC by any chance?

minimike2

Sorry no.

However I would add that the mortgage advisor also has to be able to justify you adding any funds as under new regulation they are advising you on this aspect of the lending. So adding money for a car / holiday on a mortgage can be hard to justify (unless doing over a shorter term than the main mortgage borrowing) and lending to put into savings is even more of a difficult one, since lenders do not generally allow this.

ytfcmad

SavingSteve wrote: »

ytfcmad - mind me asking which two?

1,2 and 3. Never ran any extra borrowing over any longer than 5 years, so they were basically short term loans but at rates you couldn't get for a standard type loan.

From memory i think the house had gone up in value by more than the extra borrowing between borrowing periods anyway and that wasn't taking into account the high end bathroom and kitchen refurbs.

TBH i cant even remember if they asked what it was for, i didn't have any other type of debt then or now.