Increasing Mortgage due to home improvment

[wiosna30]

Hello,

 

We want to re-mortgage our house finding better deal with diffident lender and on the same time increase amount taking Money to do some improvements like change windows, doors, rendering etc...

 

My Questions are:

 

Can we increase mortgage with different lender? (Our house price increased over 30% from the time when we bought it)

 

Will the Lender ask to provide estimates for work to be done from Contractors?

 

Doing re-mortgage how much Broker's fees are?

 

Thank you

[honeybee13]

Hello there.

 

I think you're talking about a remortgage from what you've said.

 

Unless you have problems that lenders don't like, you shouldn't need a broker. Have you approached a couple of lenders directly to ask about what you would like to do?

 

HB

[wiosna30]

no, we didn't, but I was thinking using broker the process will be faster. We dont have any problems currently with payments and we didn't have before but my question is - asking for more Money (included on our remortgage) do we need to have a proof how we spent them?

 

Will the lender pay full amount directly to my account (from the increase) or in installments, depends how works are going on?

[king12345]

It all depends from what is available in the current mortgage market, what's the loan to value, how much you want to borrow, affordability and t&c of your current mortgage.

Brokers fees are paid as commission by the lender, so no cost to you in principle, but you need to find a broker you can trust.

Best deals nowadays are the 50% LTV going as low as 1.99%.

Arrangement fees are different for each product, but as a general rule if the arrangement fee is 0 the interest rate will be higher.

You'll need to calculate in the long run if it's worth paying a £995 arrangement fee for a lower rate or not.

These fees are added to the mortgage, so you don't pay them upfront.

Finally, if your LTV is good and you pass the affordability test, most lenders would not need contractors' quotes, they'll just give you the money.

Differently if you're stretching your budget to the limit the lender would want assurance that the job would be done by a reputable company and most likely they would ask you to get insurance in case something goes wrong .

A good broker will explain all of this in much more details.

[wiosna30]

at the moment our LTV IS 54%, but if I add another £45,000 to my mortgage will go up to 64% - I hope still is not bad

[honeybee13]

I don't know if it still works this way, but the last time I was involved with mortgages, the lender would make stage payments at various stages of the work as it progressed.

 

Hopefully any lender or broker you speak to will explain this.

 

HB

[honeybee13]

I found this from the Guardian, it explains a bit more.

 

https://www.theguardian.com/money/2015/feb/26/we-want-to-remortgage-for-home-improvements

 

HB