Borrowing More When Remortgaging - Second Product

Greg12345

Hi All,
I currently have a mortgage deal with YBS with my current deal due to end on 31st October, when I renew it I would like to borrow a little more of £10k (my LTV currently is 47%) as I would like to buy a caravan. YBS are saying to me that I have to borrow the £10k as a secondary part of the mortgage for which different rates apply and that I would need to pay to have the property revalued. Is this common place or am I being mislead here? Given my LTV would still be below 60% with the £10k added on I was under the impression that £10k could just simply be added to my existing balance as I have obviously had a larger balance in the past.

Any advice or tips would be appreciated.

dimbo61

YBS are the lender and they decide the rules as to who they will lend too and what terms.
Shop round to see if you can find a better deal on the open market by yourself or using a mortgage broker.

tweeto

Greg12345 said:

Hi All,
I currently have a mortgage deal with YBS with my current deal due to end on 31st October, when I renew it I would like to borrow a little more of £10k (my LTV currently is 47%) as I would like to buy a caravan. YBS are saying to me that I have to borrow the £10k as a secondary part of the mortgage for which different rates apply and that I would need to pay to have the property revalued. Is this common place or am I being mislead here? Given my LTV would still be below 60% with the £10k added on I was under the impression that £10k could just simply be added to my existing balance as I have obviously had a larger balance in the past.

Any advice or tips would be appreciated.

Without thinking too hard about this, would a personal loan not be much better for the caravan? I was also always under the impression that you could borrow more on your mortgage only if it added value to your house (e.g. a new kitchen etc.). But I may be wrong 

Thrugelmir

Standard practice for what are commonly termed homeowner loans. Property equity isn't on tap like an ATM. The additional borrowing will be a separate loan, whatever the purpose. 

Greg12345

Thanks for the advice. If it’s standard practice that’s fine, just thought I’d check as didn’t want to sign up for something that wasn’t required

tim_london

Different lender have different ways of marketing 'further advance'/'secured loan'/'borrow more'.

Some lenders (like YBS, Halifax?) - treats the additional borrowing as a separate and gives you a different rate to the mortgage.  It is still secured to the same property of course.

Other lenders (like Nationwide) - will combine the borrowing and mortgage and give you one rate.  But if you look carefully that rate is higher than if you remortgaged without additional borrowing.

The latter is easier to deal with mentally (one loan, one rate), but it is not necessarily cheaper.

kingstreet

You aren't remortgaging, you are going back to your lender for a customer retention product and additional borrowing. If you want it all on the same rate, actually remortgage. That's a new mortgage from a new lender to repay the old one and raise the extra money. Normal status requirements and valuation apply but you may have that for the YBS extra borrowing anyway.