Remortgaging



Lambchops said:
see goat eyes reply
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Goat Eyes said:
If he has to save 25k that’s going to take him 5/10 years.

To reduce his LTV by about 5% to take him below the 80% with over payments will take him less time.
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Have to disagree with the method. He still needs the same amount of cash to do the work. That way all your doing is putting the money to one side to draw back down, by way of application with the bank. I understand you’d be saving money on the interest paid on the mortgage, but it’s not worth tying it up. It’s not impossible house prices might fall because of the whats going on within the country right now. Of course they could go up & he might end up having more equity, but you’re almost gambling for the sake of 2% interest on a mortgage vs 1%+ gain on an instant access savings account.

Let’s just say he saves cash, the equity in the property is irrelevant, because he’s got that to pay for the work getting done. Once it’s done, the house is worth more, he has a lower LTV & then can pull out more equity if needed.

Think he’s mentioned he can handle a loan over 5 years? There’s the vehicle to do it. It’ll cost more than a mortgage, but he can get a loan straight away, push his LTV up & draw the mortgage up to the 80% his lender will allow in completion.

I’m doing similar at the minute, it’ll be a mixture of cash & personal loan & consolidation on the mortgage at the end.
 
Who’s your current mortgage with? Not sure why they won’t allow further borrowing just because LTV isn’t yet below 80%, or would the further borrowing take it tocover 95% or so altogether?

Also would be another full mortgage application for further borrow (with most companies) which can take close to a couple of months to fully go ahead.
 
Take loan, improve house, increase its value.

Remortgage, pay off loan.

Only problem is if you aren't adding that level of value which would say it's probably wasted investment.
 
Have you other debts to credit cards etc? If you do have them then you will need to make sure that all of your debt is at less than 80% of the available credit. In most cases well below 80% would be recommended. Banks look at the full picture now, not just the mortgage and house value.
 

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