Advice re remortgage/fix

ellie95

Would be really grateful for some advice on our situation.

4 years ago we bought our house for £160k. We put down a 10% deposit on a 30 year mortgage with HSBC and are paying £630 per month on a 5 year fix (so 1 year left on the fix).

Since buying the house, we have made quite a few improvements - new boiler, rewire, new bathroom, new windows, decorating etc. Due to this the house is now likely worth more than £190 - £200k.

There is still a lot we need to do - new kitchen, new drive, garden landscaping, log burner replacement. We would need around £10-15k to do this work. I had our first child a year ago so our income has reduced significantly from maternity leave and me returning to work part time.

We are considering remortgaging to borrow the money for the final bit of work. There would be around £1k early repayment charges. I have an appointment to discuss with HSBC but based on online calculators it looks like due to our more positive LTV, we could potentially do this without much change to our monthly repayments or even reduce them slightly by restarting the 30 year term.

Any opinions on whether is a sensible idea are much appreciated, or thoughts of things to consider.

thank you 

ellie95

Bump - any advice please? 

RelievedSheff

Can't offer advice on your mortgage situation but I will say that you should always aim for as short a mortgage term as possible to reduce the amount of interest that you will be paying. I personally would not be happy starting again with another 30 years mortgage.

WorldCitizen

That is your personal thinking/hope that your house will be valued higher. In the reality the lender often undervalue property. They do not add to the value the money you spent on improvements. When we remortgaged we got lower value than estimated, so be prepared. And we changed everything inside - new boiler and heating system, new kitchen, new bathroom etc.

IAMIAM

RelievedSheff said:

Can't offer advice on your mortgage situation but I will say that you should always aim for as short a mortgage term as possible to reduce the amount of interest that you will be paying. I personally would not be happy starting again with another 30 years mortgage.

This is poor advice. You should have the longest term and overpay. It makes no change in interest costs and is the securest way to avoid any unforeseen dog poo around the corner where you suddenly need to halve your monthly payments. 

IAMIAM

WorldCitizen said:

That is your personal thinking/hope that your house will be valued higher. In the reality the lender often undervalue property. They do not add to the value the money you spent on improvements. When we remortgaged we got lower value than estimated, so be prepared. And we changed everything inside - new boiler and heating system, new kitchen, new bathroom etc.

This is very true. I find switching rates with the same lender is annoying, they always undervalue so you have to fight for the correct LTV.

dimbo61

If taking a new deal with your existing lender they will in most cases only do a desk top valuation !
You bought property for £160K four years ago and now owe £Xxx,xxx so LTV is XX% 
These are the deals we have at that LTV if the local housing market has not collapsed or gone through the roof in the last 4/5 years.
If you move to a new lender they may well send out a surveyor to survey the property But he/she will look at recent houses sales and the price you paid only 4 years ago.