Remortgaging after extension

sunil237

I have a plan figured but am not confident I am thinking right, so any criticism is welcome.

I bought a house this year at 172k, with a 75% ltv (129k mortgage) on a 2 year fix. During the purchase I knocked off 10k~ from the agreed sale price due to extra work required and the EU referendum. So other houses in the area would indicate the value to be over 180k

At the end of year 1 I am looking to carry out 50k worth of work in terms of a 30k extension and 20k full renovation.

At year 2 I can remortgage without an exit fee.
I would hope my house value would have risen to a minimum of 220k (looking at surrounding house values this should be achievable), for the sake of my understanding let's assume the valuation comes back at 230k (so an 8k profit from what i invested)

so at end of year 2 I will have reduced my mortgage by ~9k so I will have 120k outstanding.

So:
house price: 172k
mortgage: 129k
investment: 50k
mortgage repayment (after interest payment too): 9k

outstanding mortgage: 120k
new valuation: 230k

this brings the LTV to 56%
does this mean I have now got 110k equity in the property? even having only put in 91k +9k remortgage +10k profit.. is that mine?

can I withdraw money when I remortage and end up with a 60% LTV with a loan of 138k?
will this mean the bank will give me 28k cash and a rate for 60% ltv

as you can see I'm a bit lost at the point of remortgage, as this is my first house and first mortgage too it's a bit confusing how this works to me

Thrugelmir

Lenders may well ask the purpose of the funds that you intend withdrawing.

While you may spend £50k will it add £50k of value to the property.

amnblog

Yes, that makes sense, but I believe that is £18K cash.

sunil237

Thrugelmir wrote: »

Lenders may well ask the purpose of the funds that you intend withdrawing.

While you may spend £50k will it add £50k of value to the property.

Just wrapping my head around how the financing will work atm, and will do the numbers before I make the final decision.
Having said that, my wife fpund a house with the same layout, a street away that. Sold for. 280k, so pretty confident I should be in a profit even if just a small one as worst case.

amnblog wrote: »

Yes, that makes sense, but I believe that is £18K cash.

Thanks. I redid my math and you're right it's 18k.

Are there any "remortgage" specific fees other than the "product fee" that i need to look out for?

SavingSteve

What is your answer to the 'why do you want to borrow 18k more' question : that is the most important question for the lender.

sunil237

SavingSteve wrote: »

What is your answer to the 'why do you want to borrow 18k more' question : that is the most important question for the lender.

Pretty sure I read somewhere that they like it if you are planning to spend the money like an idiot rather than using it to pursue investments or savings.

I would probably say I'd want to spend some of it to do the gardens and my partner needs a car as we only have one between us.