Remortgage with increased equity

regency_man

Hi all,

I'm approaching the end of my fixed rate mortgage and I have a question around the value of the house.

I bought the house in a pretty poor condition as a repossession from the bank and have spent the last 2 years slowly renovating it to a high standard using my own funds. At the moment I'm not ready to sell, but is there a way of getting this increased value recognised in regards to a mortgage renewal so I can get a better rate? We're not talking insignificant amounts here, the property 2 doors down which is identical to mine (they were built as a set) and has been minimally decorated inside has just sold for £90,000 more than I paid for my property, and when you add on the fact mine is the end-terrace with a much bigger garden I think that could be higher.

So, combined with my repayments over the 2 years, I only now need a mortgage for 60% of the value of the property. I totally understand that things don't truly have a 'value' until they are sold, but is there any way to unlock this so I can get a better rate without having to sell?

I should imagine there are lots of shady ways of doing this, like 'selling' it to a family member but I'm looking for the cleanest way!

Many Thanks & Merry Christmas

Beetroot24

We bought a run down house too, and replaced the boiler, windows, roof, kitchen, bathroom, etc. When we came to the end of our fix, we moved to a different bank, and their valuation was quite conservative (lower than recently sold prices on my road), but still came in at £50k more than we had paid, bringing us to 59% LTV and therefore eligible for the better rate.


If you are planning on staying with the same mortgage company, and you don't agree with their indexed valuation, I'm positive you could pay for a new valuation

Loza2016

when my deal ended with Santander & wanted a new fix I just called up explained we'd had a double storey extension. They sent someone round to re value free of charge.

kingstreet

regency_man wrote: »

Hi all,

I'm approaching the end of my fixed rate mortgage and I have a question around the value of the house.

I bought the house in a pretty poor condition as a repossession from the bank and have spent the last 2 years slowly renovating it to a high standard using my own funds. At the moment I'm not ready to sell, but is there a way of getting this increased value recognised in regards to a mortgage renewal so I can get a better rate? We're not talking insignificant amounts here, the property 2 doors down which is identical to mine (they were built as a set) and has been minimally decorated inside has just sold for £90,000 more than I paid for my property, and when you add on the fact mine is the end-terrace with a much bigger garden I think that could be higher.

So, combined with my repayments over the 2 years, I only now need a mortgage for 60% of the value of the property. I totally understand that things don't truly have a 'value' until they are sold, but is there any way to unlock this so I can get a better rate without having to sell?

I should imagine there are lots of shady ways of doing this, like 'selling' it to a family member but I'm looking for the cleanest way!

Many Thanks & Merry Christmas

When you apply for the new mortgage, the lender will have a surveyor value the property, so any increased value will be taken into account. You will need to estimate the value when you apply.

If you aren't actually remortgaging but wanting a customer retention product from your existing lender, they will usually have an indexed valuation. Some lenders allow you to pay for an internal inspection if you think it worthwhile.

Westminster

I'm doing this at the moment and have gone with the Land Registry index for my local authority which indicates a huge 21.64% increase since March 2015 across all property types. There are no comparable property transactions nearby.

We have spent around £10k in that time on improvements and are now looking to maximise our borrowing to convert the loft and various other improvements.

The various affordability calculators indicate its possible so will see what L & C come back with tonight.

amnblog

We have a clients property revalued with a lender this month prior to selecting a new rate with the same lender.

The valuation cost £260. The interest saving will be £2,400.

If our clients had gone direct to the Lender they would not have mentioned this possibility and our clients would be £2,140 down.