When should we remortgage when halfway through a renovation?(2 Posts)
Our mortgage deal runs out in mid-April and we're desperate to change it as we've been on the extortionate rate of 6% since we were FTB five years ago
never taking out a deal that long again . We're currently in the middle if a two storey extension that will add on an extra bedroom with ensuite and dining kitchen. This will add value to the house, of course, but we've also had the whole house rewired so it's a bit if a mess. The living room and one of the bedrooms will be finished and redecorated in the next couple of weeks, the dining room isn't too bad, but the bathroom is a complete mess and there are big cable channels that need replastering in the hall, landing and second bedroom (which also really needs redecorating).
The mortgage advisor said to wait until more if the extension was up so that the mortgage company would be able to see how big it was going to be. The shell is pretty much done now and they'll knock through into the house next week. I've no idea how much the house will be valued at as the only one in the area remotely like it is next door and that was last sold in 1996.
We have to have remortgaged before I go on maternity leave in June. Should we go for it now or wait til the house is in a better state? Build is due to finish mid-May. How much difference will chaos and urgent redecoration in some areas make to the valuation?
Well they may well give you a better valuation, but they will probably also slap a retention on it, which is what happened to us. I would start the process soon, but aim to have the valuation close to the wire. That way they'll get all your payslips etc, but won't put a massive retention on it. Our mortgage company tried to withold �30k, got knocked down to �15k, have given us ten of that now that we are nearly done, but we can't have the final �5k until the kitchen and bathrooms are finished. Luckily, we've been able to borrow elsewhere, but it's been a pain. They also put a ridiculously low valuation on the house. Our house is now five bed, three bath with a kitchen diner, massive reception and a utility room. The four bed, two bath, no utility house two doors up sold for �550k last week. But apparently our house is only worth �420k. And our garden is twice the size. Whatevs.
So in short, start process, but keep valuer out until the house is as near finished as possible.
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