Borrowing more on a remortgage

XEO25

Hello, my 2 year fix ends in December this year and when I remortgage I would like to borrow some additional funds for home improvements. I've heard this is possible but I'm not sure exactly how it works.

I purchased the property in Dec 2021 for £200,000 with a £20,000 deposit. I think property was cheap at the time (it was a fixer upper). 

When using the online valuation tools the average value today is coming out at £245,000.

Am I correct to assume that when I remortgage, assuming credit/affordability is all ok, I can borrow up to 90% of the property value today, which would be £220,500, which would give us around £40,000 for home improvements? I don't plan on borrowing that much more, but is my logic correct?

Also, does the lender need to come out to verify the property value, or will they use the online valuations tools too?

The mortgage (and remortgage) is a single application, salary is £65,000, outgoings (everything) is approx £2,500 per month.

I'm well aware of interest rates rising and the implications on remortgaging alone let alone borrowing more.

Thanks to anyone who can advise.

hayley_85

Hi, yes we've done this a few times for home improvements. If you stay with the same lender its much simpler. I had to tell them how much I wanted to borrow (I wanted them to tell me how much I could have as I knew we needed the maximum for a renovation we were doing but they said i had to provide them with an amount first) so I told them what I wanted. They then work it out based on your affordibility/house valuation etc and say yes or no. Then you can negotiate if its a no, either ask for less or extend the term etc to make it affordable. Santander would only lend a maximum of 85% though when borrowing extra. Once its all accepted they just send you the extra money through you asked for, ours was in our bank within 2 weeks of asking.

We've ended up moving to Barclays this time around though as Santander wouldnt lend us enough extra to finish off the house so having to go through a full application this time but they've still not bothered with a physical valuation, just accepted my valuation I provided so must have been close enough to their computer one to not be worth the effort of coming round. Once the mortgage is completed they'll pay off Santander and give me whatever extra is left. 

Hope this helps.

kingstreet

Remember - staying with same lender will be a product switch and a further advance.

New mortgage with new lender is a remortgage. Choosing from the right product suite is vital.