Remortgage

[Freebird5]

I need to release funds to a)pay for a divorce and b) pay for property improvements. However, now I'm a single parent on a lower income any advice on how this works? Thanks in advance. 🙂

from my experience, it will be judged on your income, affordability, history of paying your mortgage and what the current "Loan to Value" is.

if your house is worth £200k and your outstanding mortgage is £100k (50% LTV) youre more likely be able to borrow more compared to if the LTV was higher.
Also is the mortgage in your sole name? as if its in joint names with your ex then it will essentially be classed as a new mortgage not a remortgage and that will possibly be stricter as if you was a first time buyer.

forgot to say, remortgage is different from additional borrowing on your property. Are you tied in to a certain mortgage product? if so, additional borrowing might be for you.

Thanks for the advice. Just what I was looking for 👍. The mortgage is in my sole name and house value is about £130000 with £62000 left to pay.

And yes I'm on a fixed rate

i was in a similar situation,
my house was worth 230k, my mortgage was 80k, i needed to borrow £30k i went to Natwest (where i have my mortgage) i was on a 5 year fixed rate, so tied in for 5 years, 3 years left. i borrowed the extra 30k at a slightly different rate and the payments come out as one each month.
so now i have a "mortgage account" and an "additional borrowing account", (maybe just natwest call it that)
was told due to the high amount of equity in the home (like you) they are more lenient on the amount you can borrow, yes! as i was worried as my income had dropped a little. speak to your lender first to see what they can do would be my advice, good luck x

If you're on a fixed rate, is there a penalty if you change before a certain time?

Will the bank waive the penalty if you take out a new mortgage with them? Or you could use an online calculator to see if it its worth paying the penalty if better rates are available elsewhere.

You then need to meet affordability criteria. £62k isn't that much and your LTV is good, so as long as you're working full time, you should be able to qualify. Have you done a budget to work out if you can afford the mortgage on your own with a good surplus in case of rate rises? Can the work wait if you can afford the same mortgage but not extra borrowing straight away?

Unless you easily meet the affordability criteria and need to stay with the same lender to avoid an early repayment charge, it's probably worth talking to a broker, especially if you have maintenance or benefit income in addition to your salary. It's also worth having a look at Moneysaving Expert

www.moneysavingexpert.com/remortgaging/

Just read @MyGirlDrew post properly. Yes, you might be able to do it as additional borrowing alongside your existing mortgage.

That would be a way of avoiding the early repayment charge on your fixed rate if there is one.

Depending on the amount you need to borrow, a personal loan might also be an option, as rates can be under 3% these days.

Thank you Barbara. Very useful and helpful. I have a clearer idea now moving forward.