How do I word this on the mortgage application?

[Seagullsandclouds]

We want to release some equity on our mortgage, but I don’t know how to word the mortgage application.

We are currently at about 60% LTV. We meant to take out a slightly larger mortgage when we initially moved (2 years ago) to keep some money in savings and have some wiggle room, but we did the application wrong so ended up with a smaller mortgage but less savings.

We’re coming to the end of the current mortgage term, and want to increase the mortgage amount by about £20k. This will enable us to do some minor home improvements, while also paying the final year of school fees.

We could afford to pay the school fees without doing the home improvements, or if we weren’t paying school fees we could afford the home improvements from income. Which do I put on the application as the reason for the increase?

Please don’t turn this into a school fees thread. We will not be taking DC out of school, and we only have one year to go.

In case it’s relevant, we have a separate investment vehicle which will pay off the mortgage in 5 years time.

I would say home improvements as that relates directly to the mortgage.

Thank you. Yes I guess that makes the most sense.

For context, I do tend to overthink mortgage stuff. I have an irrational fear that they will say no to something, or in some bizarre scenarios that they will contact us and say we have to repay everything right now because we did something wrong 😅

I think my concern is that technically the money trail will be - Money released from mortgage will go into an account from which we will pay the school fees. Money that is earned from income will be gradually spent on home improvements over the same period of time. So technically we are paying the school fees with the equity released? Even though it is enabling us to do the home improvements?

And (yes I am catastrophising now) in a worst case scenario such as loss of income we would use the money to pay the school fees as a priority over spending on the home improvements.

Am I overthinking it?

Are the home improvements that urgent that you can't wait another year to do them?

No, they are not urgent at all, but we will get much more enjoyment out of living here with them done.

Given the (extended) mortgage will still be paid off in 5 years, I’m not worried about mid-term affordability. We have just unintentionally put ourselves in the situation where the money is tied up in the house just now, and we don’t want it to be.

Don't know how lending is where you are but I would put down home improvements, lenders far more likely to lend if it's improving the security they hold for the loan. Downside is they may ask for estimates of work to be done, make sure you don't mention anything that might need planning permission or is structural. Easy enough get quotes for new kitchens/bathrooms for example if needed or floor coverings. It's just for their records, they are never actually going to check that you bought that stuff!

Home improvements all the way