Additional Borrowing - How it works?

WhiteGyro

Hi All,

Been reading the forums for some time and always found the info provided useful. After some advice on how additional borrowing works.

Basically I have a fixed mortgage (HSBC) with 2 years left, at an LTV of 30%. We are planning to undertake a significant house extension, with the need to borrow circa £170k. What I wanted to understand is: If we apply for additional borrowing now with the current provider, and approved, do the money become available from day 1 (and hence the additional mortgage payments/interest due for the full amount of £170k), or is there a way to draw money as required and hence stagger the amount borrowed over time?

Reason for asking is we are now at pre-planning stage, so the actual building work could start at any point in the following 9-14 months. In the very near term, we will want to use some of the money to build a garden office and for general landscaping.

Thanks

IAMIAM

You can apply, secure funding and wait up to offer expiry date (180 days) to draw down the funds. I have a feeling you draw down once and not in stages...but could be wrong. I have just done the same but will be drawing the funds over the summer.

ACG

No you cant stagger when you draw down on it. 
You could make multiple applications, but that is not something I have done before so I am not sure if underwriters would be open to it or not. 

One of those things you would need to run by them. 

Hoenir

You might be better to stagger the equity releases in seperate distinct projects. 

WhiteGyro

Great, thank you everyone. Sounds like I need to set up a call with one of the HSBC mortgage advisors to clarify whether 2 or 3 staggered applications within a period of 1.5 year would be acceptable or frowned upon.