Secured Loan against house or remortgage? Confused?

Clow

Hi,

I took out a 100% FTB mortgage last year over 25yrs @ 6.29%. The amount was for £125800. I bought the house cheap as i had to do a few things to it, and its current value today i think is around £160k. Yes i know about the falling market, but this is based on recent sales on identical properties and a friend of a friend who is a surveyor.

Anyway, in order to do the house up, i took out a £25,000 personal loan with Barclays.

I am managing to pay them both but would like to see about putting the remainder balance of my loan (£21k) onto the house. Im not sure if this is possible? Is this classed as a remortgage or secured loan, i dont know, im not too good with things like this?

If the house is valued at £160,000 outstanding mortgage will be around £124,000 giving me current equity of around 22%.

Can i release this equity in order to pay my loan off, will it go back to near 100% and will my lender allow this based on todays mortgages? Or is it a secured loan with my mortgage lender at the same rate as what my mortgage is or will it be a different/higher rate? Will i be fined or have fees to pay etc?

To me, it looks like £124k mortgage + £21k loan = £145k (House valuation @ £160k)

Sorry for what may seem like a stupid question, im just not really sure. I would like to put it on my house, i plan on living here for the rest of my life so not interested really in negative equity etc, i just want to put my loan debt onto my house in order to reduce my monthly payments.

Any help appreciated.

(I am posting the above on behalf of a friend who doesn't have an MSE account)

Conrad

Ask your lender would seem to be the best advice.

I doubt they will agree with your valuation, honestly I get enquiries all the time like yours and the applicant is always certain thier valuation has increased due to work done, but I can tell you they are almost always very optimistic.

Your lender may have an automated valuation option whereby they can tell you over the phone what they think the value is.

If you try another lender for the entire mortgage I assume you will pay an early repayment charge so its probably a non starter.