Remortgage / Equity release dilemma

summer.gentle

My OH and I work together in our own business and have a modest income.

Mortgage was taken out by my OH in the 80s when he was employed: the mortgage is for £70k, home valued at around £200k.

We need some extra funds to renovate the house with a view to selling in early 2008 and would also like to consolidate some debt by adding some or all to our mortgage. In short, we would like to borrow an additional £60 - £70k for 12 months max.

For simplicity's sake (and because we plan to sell up in the near future and not buy again in the UK), we'd prefer to stick with our current mortgage provider if possible (abbey, interest-only tracker mortgage).

When my OH changed his mortgage type a few years ago from endowment to interest-only, abbey just needed a confirmation letter from him (handy, really, as he was wasn't working at the time.) He didn't change the mortgage amount, just the type.

My main question is... is there a limit or % at which abbey would allow an "add-on" to a mortgage (say £70k on a £70k mortgage) without my OH needing to re-apply, provide proof of income, etc? It would be nice if we could avoid this and a new house survey, revaluation, etc, especially as we're planning to sell soon and are self-employed.

Alternatively, we have thought about options like a buy-to-let mortgage, where the borrowing could be based on the value of the property and its potential rental income (we have also considered renting out our property when we move).

Also, from the lender's point of view, is it better for us to to apply for this before or after Christmas?

Many thanks for any help you can offer!

Summer

EdInvestor

summer.gentle wrote: »

My OH and I work together in our own business and have a modest income.

How modest?

When my OH changed his mortgage type a few years ago from endowment to interest-only, abbey just needed a confirmation letter from him (handy, really, as he was wasn't working at the time.) He didn't change the mortgage amount, just the type.

Actually he probably didn't change the mortgage at all, just got the endowment unassigned.I don't suppose you still have the endowment?

summer.gentle

Last year's income (to April 2007) was £36k before tax.

The letter he wrote to abbey was "to request that you convert my mortgage to an "interest payment only" account", so no payment vehicle to cover repayment of the capital and no endowment anymore.

EdInvestor

I'll leave the brokers to comment on the feasibility of your idea, but suspect in the current climate you might get some but not all of the amount desired.

We need some extra funds to renovate the house with a view to selling in early 2008

Sounds fine

... and would also like to consolidate some debt

Not usually a good idea.Why not go over to the Debt free Wannabee board and get some help to deal with the debt in a different,more effective and cheaper way?