Remortgage & Borrow Money Advice

benst0ne

Hello all, first time poster on here, I would love some advice on my current situation if that is ok... Let me explain!

So next month is the end of our 4 year mortgage deal with nationwide and we're looking to remortgage. I rung them last month and told them the situation, in 2012 when we brought the house for £120,000, we borrowed an extra £10,000 from them to work on the house it desperately needed. We recently got the house valued by an estate agent at £175000, which we are so pleased with.

But the man from nationwide on the phone said they only go against the value index? Which they said would value the house at £153000? I may be wrong but I'm sure he said value index, which seems very unfair. So my question(s) are...

1) If I went to another bank, say TSB for example, me as a new customer, would they come round and value it themselves, and be another index style valuation, or go off the estate agents valuation?
2) The reason why we're doing this is because ultimately I want to borrow more and start my own business. I figured were down to £92,000 on our mortgage and £9000 on the additional borrowing, could just remortgage and borrow more for the business aswell, knowing there is extra money in the fact that the house is worth more.

Am I making this extremely complicated, or should we just aim to sell the house, use the profit to put a deposit down on another house and money to start our business?

I appreciate this is alot of explaining but this would really help!!!
Thank you all.
Ben :beer:

AnotherJoe

benst0ne wrote: »

Hello all, first time poster on here, I would love some advice on my current situation if that is ok... Let me explain!

So next month is the end of our 4 year mortgage deal with nationwide and we're looking to remortgage. I rung them last month and told them the situation, in 2012 when we brought the house for £120,000, we borrowed an extra £10,000 from them to work on the house it desperately needed. We recently got the house valued by an estate agent at £175000, which we are so pleased with.

But the man from nationwide on the phone said they only go against the value index? Which they said would value the house at £153000? I may be wrong but I'm sure he said value index, which seems very unfair. So my question(s) are...

1) If I went to another bank, say TSB for example, me as a new customer, would they come round and value it themselves, and be another index style valuation, or go off the estate agents valuation?
Yes there would be a new valuation. However, how that is done is variable. Sometimes you can pay extra for a personalised one, ega visit, if not they might just look at how values in your area have risen generally since you bought which puts you back to square one.


2) The reason why we're doing this is because ultimately I want to borrow more and start my own business. I figured were down to £92,000 on our mortgage and £9000 on the additional borrowing, could just remortgage and borrow more for the business as well, knowing there is extra money in the fact that the house is worth more.
Most (all?) lenders would be very reluctant to do that. They dont do business loans or if they do its at different rates and conditions. To be crystal about it, you'd have to lie and say it was for house improvements or similar.

Am I making this extremely complicated, or should we just aim to sell the house, use the profit to put a deposit down on another house and money to start our business?

That would be very expensive and disruptive. I wouldn't do it if i liked the house. Have you looked at just getting a business loan, or indeed "a loan"? How much do you need to borrow over what period??

amnblog

You need to be careful here Ben.

Lenders are not keen on lending on your home for business purposes and I believe it is a 'no' with Nationwide.

This does not mean it cannot be done with another Lender.

[here, I assume this is your first business, if not any you are experienced, apologies]

You also need to think if you actually want to borrow against your home to start a business. Using your home as security is storing up a nightmare if the business plan does not work.

Well worth borrowing funds that are unsecured (personal loan or overdraft), even if it costs you more in interest.

Get yourself some advice before you do anything.

benst0ne

Thank you both for your quick replies, i really appreciate you taking the time to look into my issue and reply so helpfully!

So yes it does seem an idea to go elsewhere and look for a new mortgage deal, and perhaps to keep the mortgage and business separate! And to perhaps just look into getting a personal/business loan.

Thank you both so very much!:beer:

TrickyDicky101

Hi

Have you made overpayments in the last 4 years? On a typical 25 year mortgage you would expect to pay off much less than £28k on an original borrowing of £120k (e.g.if one assumes an interest rate at 4% p.a. over 25 years then you would expect to have paid off approximately £12k over the 48 months).