Please can someone explain remortgaging?

[Leonberger]

We bought a house that’s a bit run down at the beginning of 2020 and it’s got to the point I need a fair bit of money to do some major jobs (windows falling out, driveway flooding etc)
My fixed deal will be running out and I need to think about fixing again.

I paid £210k for the house and only could afford a 5% deposit. I think the mortgage we now owe is £194k.

The house has increased in value to roughly £250k, partly due to the work we have done and also just a general price increase in the area.

Does this mean I now have enough equity to remortgage and take some more money out to do the work at the same time as fixing again? Would I need to get someone out to revalue it and does this generally cost money to do?

I remortgaged recently and the bank sent someone round for value it but they do ask you what it is before so could be worth getting someone round first as they’ll probably value it higher! I’d speak to your current lender first, as they know your details etc and ask them if you could borrow more and the best rate and then look around to compare to other lenders and see if there are any better rates.

Following for tips, as also thinking about remortgaging!

Yes you could as you have more room in the loan to value, but you'll also be potentially limited by your salary in what you can borrow. Go on a mortgage calculator and put the numbers in.

Speak to a mortgage broker, they will compare it all and tell you the best way to do it. Dp has just done it to take out 20k for the same reason and the broker sorted it all.

You need to think about affordability as well. If you could only afford a 5% deposit then presumably you borrowed as much as you could afford, so the value of the house wouldn't affect that.

Also if there's major work that needs doing, the mortgage provider may not value it as highly as the market!

But in theory yes, if you can afford to pay more on your repayments each month, then you'll be able to borrow more against the value of the house, if the house is worth more. At worst you will get a better deal through having a lower loan-to-value ratio - you can get better deals when borrowing 80% of the value than when borrowing 95%.

Usually you can choose either a fixed-rate mortgage with fees, or without fees that will probably have a slightly better interest rate. You'll be given the figures to work out which you want to go for.

www.moneysavingexpert.com/mortgages/remortgage-guide/

Remember to factor in that gas and electricity are forecast to double in price. You will therefore have less to spend on monthly mortgage repayments and other things.

Thank you all of you!

We didn’t borrow as much as we could afford but I just didn’t have enough cash for the deposit!

Our house was owned by someone who let it get in a state so it’s looking a million times better now it’s been gutted and replastered. We have also had new kitchens and bathrooms along with the general increase so I think it would be more marketable if we were to consider selling so I’m hoping an agent would agree. Houses on my street are all individual but the only one that sold other than us was £500k. My next door neighbours house also sold for £280k with one less bedroom, a smaller garden and we have nothing but fields on one side instead of being boxed in so here’s hoping.

I will speak to a broker. Glad to hear it might be possible though.