Remortgage values

Dollymix12

Hi all

just looking for a little advice, we want to remortgage to renovate our house. To do the work we want to do we will need to borrow up to the value that the house will be worth once the work is complete (we have only been in the house for 4 years) is this possible? Just to give you an idea the value of the house will be 40k more once the work is completed but obviously the house would not reach that value when asked how much its currently worth, do mortgage companies offer lending where they release funds based on the work completed and value at that point?

dimbo61

No sorry they will only value a property at what it's worth today not what it might be worth once you have built a two storey extension on it. 

Dollymix12

So would need to borrow up to the current value, maybe obtain a loan for the rest and then remortgage again once all the work is complete?

K_S

@Dollymix12 What the poster above said.

Yes you would need to borrow (either a further advance/additional borrowing with your current lender or a capital-raise remortgage with another lender) on the current value (usually maxes out at up to 90% LTV), do the works then remortgage again once complete.

Do take care not to take on excessive short-term debt (cc, personal loan, etc.) to plug in any shortfalls in your budget as that often causes issues when it comes to remortgage time.

Dollymix12

K_S said:

@Dollymix12 What the poster above said.

Yes you would need to borrow (either a further advance/additional borrowing with your current lender or a capital-raise remortgage with another lender) on the current value (usually maxes out at up to 90% LTV), do the works then remortgage again once complete.

Do take care not to take on excessive short-term debt (cc, personal loan, etc.) to plug in any shortfalls in your budget as that often causes issues when it comes to remortgage time.

Thanks so much, I’m going to speak to our lender tomorrow, it’s frustrating to have to take out a more expensive loan as we don’t need much more than the current value of the house and even at 90% we wouldn’t be paying much more than we are now. But hopefully the work will only take a few months so won’t be paying it too long before another remortgage