Funds for Home Improvements - 2nd mortgage/remortgage?
Discussion
We remortgaged earlier this year on a 5-year fix at about 80% LTV with a view to either move or do home improvements at the end of the fixed period. (We've lived here just over 4 years, and it's our first home, hence the relatively large LTV.)
Since then we've both had substantial pay rises which were far in excess of what we anticipated and having had a look at property locally have come to the decision that our house is probably the best fit for us and it makes more sense to spend money here rather than to pay £12k in stamp duty/moving costs and more bringing anything else up to our tastes... So we're considering bringing these works forward and doing them sooner, hopefully in 2022.
We think our estimate of the value of the house for the recent remortgage was conservative which combined with the activity in the market locally means we think our LTV is nearer 75%.
With our new pay we're confident we could find another £250-300/month and at present have about £85-90k of equity in the house.
Realistically, what are our options for remortgaging/second charge mortgages for freeing up some money to do these works?
How do we work out what we might be able to borrow or what this might cost?
Is it worth talking to a broker at this point or do we really have no chance of getting anything worthwhile?
Neither of us are particularly knowledgeable about second mortgages so any advice welcome. Thanks in advance!
Since then we've both had substantial pay rises which were far in excess of what we anticipated and having had a look at property locally have come to the decision that our house is probably the best fit for us and it makes more sense to spend money here rather than to pay £12k in stamp duty/moving costs and more bringing anything else up to our tastes... So we're considering bringing these works forward and doing them sooner, hopefully in 2022.
We think our estimate of the value of the house for the recent remortgage was conservative which combined with the activity in the market locally means we think our LTV is nearer 75%.
With our new pay we're confident we could find another £250-300/month and at present have about £85-90k of equity in the house.
Realistically, what are our options for remortgaging/second charge mortgages for freeing up some money to do these works?
How do we work out what we might be able to borrow or what this might cost?
Is it worth talking to a broker at this point or do we really have no chance of getting anything worthwhile?
Neither of us are particularly knowledgeable about second mortgages so any advice welcome. Thanks in advance!
RichTT said:
Would it not just be easier to find out what amount of unsecured loan you can get for 250-300 a month over the term you're looking at? Your bank should offer a competitive rate for customers. Natwest offered me 17k at 3.4% over 4 years. which is about ±300 a month.
We considered this, but the maximum borrowing is £25k and ideally we need at least £12k more than this for what we had in mind. While some of that difference can be made up with general savings, we didn't really want to wait another 3+ years if we don't have to.romeogolf said:
We considered this, but the maximum borrowing is £25k and ideally we need at least £12k more than this for what we had in mind. While some of that difference can be made up with general savings, we didn't really want to wait another 3+ years if we don't have to.
There are unsecured loan providers who will do £35k........Sarnie said:
There are unsecured loan providers who will do £35k........
Having googled it there do appear to be some lenders willing to offer this, but they also limit the term to 7 years, which puts it above the £300/month we're comfortable to spend right now.Ideally we'd be looking at £35-40k over 15-20 years initially, with a view to repay it in full and combine it with our existing mortgage in 2025 when the term is up and the house is worth a bit more, but if an unsecured loan is the better option then this might be a project we have to delay for a few more years.
romeogolf said:
Having googled it there do appear to be some lenders willing to offer this, but they also limit the term to 7 years, which puts it above the £300/month we're comfortable to spend right now.
Ideally we'd be looking at £35-40k over 15-20 years initially, with a view to repay it in full and combine it with our existing mortgage in 2025 when the term is up and the house is worth a bit more, but if an unsecured loan is the better option then this might be a project we have to delay for a few more years.
Just speak to your current lender and aske them for a further advance.....Ideally we'd be looking at £35-40k over 15-20 years initially, with a view to repay it in full and combine it with our existing mortgage in 2025 when the term is up and the house is worth a bit more, but if an unsecured loan is the better option then this might be a project we have to delay for a few more years.
My limited understanding is that there are two options here (I'm thinking about the same thing) - ask current lender if they'd give it to you, list additional borrowing and reasons for when you re-mortgage?
I need about 100k to do some work here which means I'd need to use a combo of tools to borrow it and to me it seems ludicrous to do anything other than borrow it at under 1% vs use savings/loans/credit cards etc given none of that is anywhere close to the same rate/earning significantly more in interest in the case of savings.
I need about 100k to do some work here which means I'd need to use a combo of tools to borrow it and to me it seems ludicrous to do anything other than borrow it at under 1% vs use savings/loans/credit cards etc given none of that is anywhere close to the same rate/earning significantly more in interest in the case of savings.
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