Release money from mortgage

stash999

Hi all,


I am thinking of releasing anything from 10-20k from my mortgage to put an extension on the house, I bought the house in 2013 for 204k & it was valued over a year ago at 320k so I am happy to release money against it. My fixed rate term is up in april next year (2018), would I better better off waiting until then and doing it as part of remortgaging or does it make no real difference ? thanks.

Lilla_D

There are a few options:
- you could remortgage now and pay the early repayment charge (penalty), which can be quite a few thousand pounds, so best to check your mortgage offer or annual statement for the details of it;
- you could take a further advance from your current lender, but if that will have an early repayment charge for 2 years again, then the two mortgage parts will be out of sync with their expiry dates - having said it, a 1-2% early repayment charge on £10k-£20k is only a few hundred pounds, so you may be happy to take that hit and remortgage the whole lot next year;
- you could take a second charge from another lender, but note the potentially higher rates, costs and early repayment charge;
- you could take a personal loan for this relatively low amount and consolidate the remaining amount into your mortgage next year, if you wanted to consolidate it at all;
- wait until next year and release the capital then;
- save up until next year (if you can) and avoid extra borrowing

Which one is the best option depends on the actual figures and your preference for the timing of the extension to be done. Simples

stash999

Thanks,

so i guess what i am looking for is a 2nd mortgage from my current lender, the redemption fee's are minimal so i could eventually consolidate it. can i borrow from another lender ?

rhysadams

You could use 2 different lenders to fund the mortgage/extension. They will both place charges on your property.