Loan for extension

stunews

Hi, I want a loan for a house extension. My first thought was the overpayment I made on my mortgage four years ago. It's approx 1/4 of what I need. I called the bank. They told me that I couldn't access this amount as the amount had been applied to the mortgage & monthly payments recalculated. 
They told me I would need to extend the mortgage - something I expected to do anyway. I was a little perturbed however as I'm fixed til 2025 at 1.5%, and they said extra lending would be at 5-6%!

First question - the bank isn't obliged to lend you back what you overpaid at the original rate? It's kind of what you'd expect a reasonable person to do in the same situation, however: Bank. 

Anyway, I then answer a few questions about extending the mortgage, and they tell me that the amount I can borrow is, incidentally, the same as the overpayment I made. Unexpected, as I asked for x4 that amount. Currently LTV is 20%. I'm asking to go to 27%. I'm freelance. I'm earning a less than I used to because decided to spend more time with the family. I've got a couple of interest free credit cards on the go.

I though there had been some mistake, for example, they asked how many dependents I have, and I said 3 without thinking about the fact my wife has income. I called back, answered the questions again, clarifying that my wife wasn't a dependent, there was a recalculation and this time I was told I wasn't eligible to borrow anything! When I asked about my wife's income I was told that because the mortgage is in my name, my wife's income isn't taken into account. 

Any suggestions? I have any other options? Do I have to get a j.o.b? 

MattMattMattUK

stunews said:

Hi, I want a loan for a house extension. My first thought was the overpayment I made on my mortgage four years ago. It's approx 1/4 of what I need. I called the bank. They told me that I couldn't access this amount as the amount had been applied to the mortgage & monthly payments recalculated. 
They told me I would need to extend the mortgage - something I expected to do anyway. I was a little perturbed however as I'm fixed til 2025 at 1.5%, and they said extra lending would be at 5-6%!

First question - the bank isn't obliged to lend you back what you overpaid at the original rate? It's kind of what you'd expect a reasonable person to do in the same situation, however: Bank. 

No they are not. I also do not thing a reasonable person would think that.

stunews said:

Anyway, I then answer a few questions about extending the mortgage, and they tell me that the amount I can borrow is, incidentally, the same as the overpayment I made. Unexpected, as I asked for x4 that amount. Currently LTV is 20%. I'm asking to go to 27%. I'm freelance. I'm earning a less than I used to because decided to spend more time with the family. I've got a couple of interest free credit cards on the go.

I though there had been some mistake, for example, they asked how many dependents I have, and I said 3 without thinking about the fact my wife has income. I called back, answered the questions again, clarifying that my wife wasn't a dependent, there was a recalculation and this time I was told I wasn't eligible to borrow anything! When I asked about my wife's income I was told that because the mortgage is in my name, my wife's income isn't taken into account. 

Any suggestions? I have any other options? Do I have to get a j.o.b? 

You should speak to a broker, they will be able to advise you better, however keep in mind that any new lending will be at that 5-6% range. You also need sufficient income for the additional borrowing, if you do not meet the lending criteria then they will not be able to lend to you.