Remortgage for home improvements

dilby00

Hi all -

I'm 2 years into owning my home and have had a letter from Nationwide to switch, offering my money to do so as a thanks.

I'm generally happy with them and happy to stay but the thing is I plan to do an extension next year and am wondering if there is a way to mortgage with this in mind. I'm originally from Australia and we call that over there an equity advance mortgage (from memory) but I am unsure if anything like that is done here. The idea being that they see your plans, and lump the costs into the repayments so you don't foot a huge bill.

thanks!

somethingcorporate

You are just borrowing more money so a mortgage extension, you can do it from the nationwide home page. We have just done this, to fund an extension. Assuming you have the equity in your home they will value the house, go through/ask for some paperwork and that's it.

Unless, you don't have the equity and are looking to borrow against the future value of the home - which is a whole different ball game.

dilby00

Thanks for the reply. I haven't started the extension, it's something we're planning to do after Christmas. Is there almost no chance then?

somethingcorporate

How much is your house worth, how much is your current mortgage and how much are you looking to borrow?

Usually they let you borrow up to 85% LTV as a simple additional advance.

If you need to borrow based on a future value you may want to ask that question to them directly as I have no experience of this.

kingstreet

No lender will lend against the improved value until the work is done.

SavingSteve

dilby00 wrote: »

Thanks for the reply. I haven't started the extension, it's something we're planning to do after Christmas. Is there almost no chance then?

There is a chance as the value of your home today is likely higher than what you paid for it, even before you've done the extension. Do the sums as somethingcorporate suggests.

amnblog

kingstreet wrote: »

No lender will lend against the improved value until the work is done.

This is the key point.

The_Oaks_Mortgages

Do you know what your property is worth at present, and what is outstanding on the current mortgage.


Nationwide would offer up to 85% on the value, but other lenders would potentially offer upto 90%.


This will also come down to affordability. It would be worth getting advice from a mortgage advisor to see if Nationwide is the best option for you.