Require cash for a loft conversion - what are my options re financing it?

zesh90x

Hi guys,

Firstly apologies if I am posting this in the wrong part of the forum - not too sure where this belongs but here goes my question....
We currently have a 5 year fixed mortgage, currently in year 1, and since purchasing the house we've spent circa £30k on furnishing/repairs, etc., therefore are pretty positive that the value has increased significantly if the property was to be revalued.

I suppose the question is, if we want to release that 30k in cash or more, would we need to re-mortgage (is that even an option), or is there an alternative option available to us?

We would, in theory, be happy to add to the existing loan, but reckon that given we maxed out on our affordability calculations not sure if the existing lender would be happy to lend an additional £30k+ against the property unless the furnishing, etc. are considered?

Any advice would be awesome .

Thanks guys!

pramsay13

Yes in theory you can add to an existing mortgage for home improvements or remortgage at a higher amount. 

It is unlikely though that you will have added £30k in value without doing some major extending.

Speak to your mortgage provider in the first instance or a broker for some options.

zesh90x

Sorry should have been clearer- we've spent around 30k on the property as it was purchased unfurnished.... so now has a new kitchen, wall plastering flooring and so on and so forth...But yeah will get in touch with my broker in that case.

Can you re-mortgage or take an additional loan for home improvements prior to the 5 years being up given we got a 5 year fixed product?

foxy-stoat

You will unlikely increased the value in the eyes of the lender by ripping out a usable kitchen and installing a new one, or putting carpet or wood flooring.  So depending on your LTV when you bought the property will likely have an impact on borrowing £30,000 now.

If you try for a secured loan then you will find it very expensive.  If you remortgage you will have to pay the early repayment charges, you may be able to get additional borrowing with the current lender depending on the numbers.

[Deleted User]

You can either:

Remortgage to a new provider and take 30k out
Take a further advance from your current lender
Take a 2nd charge mortgage with another specialist company.

Last option is more expensive on interest rate but avoids early repayment charges you would incur by remortgaging.   Middle option is probably preferable 

csgohan4

as above, and been mentioned on here many times, just because you spent x, doesn't mean your house goes up by X. 

zesh90x

Thanks all, appreciate it 😊. Will. Get in touch with my broker and see what the current lender has to say .