Remortgaging and extension to property

aj9648

Hi

Hopefully someone can help me with this one.....I've never had a mortgage before and my 5 year fixed comes to an end in may 2018 and looking to remortgage

I've done quite well in the 5 years - house was £310k, mortgage was for £150k and have £27k left on the mortgage

I am thinking of doing an extension to the property at that back. So am I able to 'fund' this through a remortgage. It may cost me about £60k. And how do I go about it.

Also what happens if I don't go ahead with the extension - although it would nice to have lots of space, the disruption with 2 small kids is not something I envying!!

Any thoughts welcome

Thanks

glosoli

aj9648 wrote: »

Hi

Hopefully someone can help me with this one.....I've never had a mortgage before and my 5 year fixed comes to an end in may 2018 and looking to remortgage

I've done quite well in the 5 years - house was £310k, mortgage was for £150k and have £27k left on the mortgage

I am thinking of doing an extension to the property at that back. So am I able to 'fund' this through a remortgage. It may cost me about £60k. And how do I go about it.

Also what happens if I don't go ahead with the extension - although it would nice to have lots of space, the disruption with 2 small kids is not something I envying!!

Any thoughts welcome

Thanks

Surely you have had a mortgage before as you have one just now!?

Your options really are to approach your existing provider for additional borrowing, or approach another lender to do a remortgage with additional borrowing, or if you didn't fancy doing the leg work yourself you could contact a mortgage broker to try and help source the best deals.

If you didn't go ahead with the extension and if you had the funds, then it would be up to you with what you used the money for. You could opt for an Offset arrangement so that you only accrue interest on the mortgage balance should you actually begin to drawdown the funds.

If you have brought the mortgage down substantially through overpayments in recent years, you might be able to claim back any overpayments that you have made, either now or at the end of the fixed rate period, thus avoiding having to go through the process entirely if there is sufficient funds there.

aj9648

glosoli wrote: »

Surely you have had a mortgage before as you have one just now!?

Your options really are to approach your existing provider for additional borrowing, or approach another lender to do a remortgage with additional borrowing, or if you didn't fancy doing the leg work yourself you could contact a mortgage broker to try and help source the best deals.

If you didn't go ahead with the extension and if you had the funds, then it would be up to you with what you used the money for. You could opt for an Offset arrangement so that you only accrue interest on the mortgage balance should you actually begin to drawdown the funds.

If you have brought the mortgage down substantially through overpayments in recent years, you might be able to claim back any overpayments that you have made, either now or at the end of the fixed rate period, thus avoiding having to go through the process entirely if there is sufficient funds there.

So basically if I were to ask for say c£90k that should not be an issue with a new provider?

I didn't understand your last paragraph in terms of claiming back overpayments - how does that work. I have made really substantial overpayments in the 4 years I've had the mortgage.

Thanks

glosoli

All things aside such as affordability, meeting their criteria, etc then generally it should not be an issue. You may have to provide evidence of where the funds are going, through quotes from a builder or something, but in principle it is something you can do and people do regularly.

In relation to the overpayment point, you will need to check your original offer document under section 12, in relation to borrow back, and also contact your existing provider regarding their criteria surrounding it, however generally when you overpay, your overpayments go into an "overpayment pot", which may open up benefits to you, such as being able to borrow this money back without the requirement to go through a further application, or to take a payment holiday. In theory, subject to the above, you could borrow this money back that you have previously overpaid, and simply apply for a new product on the new, higher balance, with your existing provider, thus avoiding a full mortgage application process.