Remortgage advice

superbez

Hello

A bit of background. We bought a house worth 350k and put just over half the amount (180k) down. We have since invested 30k in renovations and recently had it valued at between £380-390k. The problem we had is that we accumulated debts of around 10k as we had to take a loan out for 5k to finish the work and have also around 5k on the credit card, the rest was from our savings.

I’m now worried that the lenders will look at us and say we can’t manage our financial situation if we are applying to remortgage with these debts. The plan was always to put the money in, do the work and then take the money back out again as the house has now increased in value to pay off the 10k, put the 20k back into savings and still be paying around the same monthly mortgage as we had been doing but have the benefit of all the work being done.

Should I be worried? Is this even possible? It’s the first time we’ve ever remortgaged and it’s playing on my mind. We’re due to visit an adviser next week.

Thank you

getmore4less

The plan was always to put the money in, do the work and then take the money back out again

That is the risky strategy.

If you knew you needed to do the work the best deals kick in at 60% that would have given you another £30k contingency that you could just overpay what you did not use.

if affordability is OK then no problem or just stick with the current lenders retention deal and overpay the CC debt and start saving again.

JayCeeEssex

Obviously not knowing all of your details, but from your brief overview I would have no major issues in discussing your options and if it was felt that debt consolidation inside your mortgage was the best way forward, then on the assumption that your incomes fitted and the overall affordability hadn't changed, then I would say you should be fine!
It may well be worth while chatting with your current lender to ask about topping up your current deal...you will often find this is a good way forward!

ACG

I dont think it will be a major problem personally.

superbez

Thank you all for your help, we are fortunate that we can quite easily afford the monthly payments but it’s just we did a two year fixed and we sunk everything we had in and we’ve literally JUST finished the work, 2 months before it’s up. I was just worried like I said that it might come across that we are struggling. One final question about taking some money back out as explained, is this a fairly easy thing to do and what sort of timeframe should we allow? I am beyond stressed out just thinking about it... Thank you once again.

getmore4less

2 months get on the case now.

Probably going to be fine if nothing much has changed

What was the max you could have borrowed 2 years ago?

[Deleted User]

Remortgages with additional borrowing can be very straightforward as long as you go to the correct lender. However, that may be your sticky point.
A lender would most likely treat the CC's as debt consolidation and wouldnt be any real hassle but getting the money out to be kept as savings may be trickier. They dont really like giving you money for no reason.

Out of curiosity i spoke to Natwest, Nationwide, and Santander who all said they wouldnt release funds just to replenish savings. They would need a stated purpose for the borrowing.
Maybe some research required. Get a broker to get some details and find a suitable lender.

superbez

The answers to the last two posts. Number 1, I’m really not sure how much we could have borrowers, they happily agreed to lend us what we needed and we didn’t look much further than that, we’re still learning how all this works. Number 2 - the money that we would put back into savings is earmarked for a garage conversion, once again to add value to the property and create additional space as the kids grow older. Do you think they might be likely to release it on those grounds? I am seeing a broker next week to see what the options might be. I really do appreciate all the help guys so thank you

[Deleted User]

Just say it's for further home improvements as your funds ran out. Don't mention putting it in savings as it will muddy the waters.

Good luck