New mortgage & thenremortgage for building works

IMF73

Im aftyer some guidance please....I am lookng to apply for a mortgage to buy a new house, the house willneed some building work as I am planning an extension. Realistically I wont start the building work until 6- 12 months aftrer moving in.

Whats the best way to mortgage this? 
1. Get a bigger mortgage up front that will cover the building work?
2. Can I get an initial mortage and then remortgage after 6 months? (I assume this would incur costs)?

Im sure this is fairly common
Any other options ?
Thanks

GMSstockton

The answer to this is the deposit that you have available.   Mortgages start with a 5% deposit.  Rates are higher but better than it will be and cheaper than applying for a second charge 6 - 12 months later.  You can get a mortgage with NO ERCs then clear it and remortgage in 6 months time.  No lender I can think of will lend money to you based on the property value after the extension is completed.  It will be based on the property value today.  Even if the extension will add thousands to the value.  You can obviously remortgage when teh extension is completed...  This will hopefully reduce the loan to value. so you may get a cheaper rate mortgage after he work is completed.

IMF73

GMSstockton said:

The answer to this is the deposit that you have available.   Mortgages start with a 5% deposit.  Rates are higher but better than it will be and cheaper than applying for a second charge 6 - 12 months later.  You can get a mortgage with NO ERCs then clear it and remortgage in 6 months time.  No lender I can think of will lend money to you based on the property value after the extension is completed.  It will be based on the property value today.  Even if the extension will add thousands to the value.  You can obviously remortgage when teh extension is completed...  This will hopefully reduce the loan to value. so you may get a cheaper rate mortgage after he work is completed.

Thanks, as far as deposit, I am selling my current house (whihc doesnt have a mortgage) so this will be the deposit, we will be requesting a mortgage of around 20% of the house price (approx). This is wothout the fnds for the extension.
I would like a mortgage that I can also put a lunmp sum in each year on top of my regular payments. 
So are you saying, try to get a larger mortgage now that will cover the extension work?

GMSstockton

IMF73 said:

GMSstockton said:

The answer to this is the deposit that you have available.   Mortgages start with a 5% deposit.  Rates are higher but better than it will be and cheaper than applying for a second charge 6 - 12 months later.  You can get a mortgage with NO ERCs then clear it and remortgage in 6 months time.  No lender I can think of will lend money to you based on the property value after the extension is completed.  It will be based on the property value today.  Even if the extension will add thousands to the value.  You can obviously remortgage when teh extension is completed...  This will hopefully reduce the loan to value. so you may get a cheaper rate mortgage after he work is completed.

Thanks, as far as deposit, I am selling my current house (whihc doesnt have a mortgage) so this will be the deposit, we will be requesting a mortgage of around 20% of the house price (approx). This is wothout the fnds for the extension.
I would like a mortgage that I can also put a lunmp sum in each year on top of my regular payments. 
So are you saying, try to get a larger mortgage now that will cover the extension work?

Yes,  You can get the mortgage for what you need.  As for over payments you can over pay by 10% a year from most lenders, without penalty.  Or look at an offset account.  Put the overpayment in to a separate pot to cover the mortgage interest.  Or look for a mortgage with NO Early repayment charges.  This way you can overpay as much as you want when you want.  But if the lump sum is less than 10%...  stay with that as rates tend to be better on these products.  Rates with a 20% mortgage up to 60% of the property value will be the same.