Remortgaging Query

danhenshy23

Hi,

I'm in the proces of buying a house with a 95% mortgage in order to retain some funds for renovating. I expect that I will spend £20k on renovation work which I hope will increase the value by roughly the same amount.

My question is, what options will be available to me in 2 years time (end of fixed period) if the property has grown in value? Given the increase in equity, would I be able to use this to lower my monthly mortgage payments and if so is there a downside to doing this?

Thanks
Dan

csgohan4

if your property has increased in value, when you remortage you may have a lower LTV and therefore better rates.




however don't expect spending on X on renovation means your value is +X

RelievedSheff

Spending an amount of money on a property very rarely results in that same amount being added in value to the property.

You are at a high LTV so depending on where you are buying and how the market performs there in the next couple of years you could well find yourself unable to remortgage if house prices fall in your area and increase your LTV further.