Mortgage options

[nickyb]

Hi, we are currently buying a house that needs quite a bit of work doing to update it.
We are currently in a 3 year fixed deal, in 3 years time we are looking to increase the value of the house by 15-20k (unless the market drops even further of course) we wont be looking to sell but we would hope to get a much better mortgage as the value of the house would be much greater than the amount we would be lending.
Am i then able to get the house re-valued for a new mortgage or will this still be based on what we paid for the house 3 years previously?

At the moment we are borrowing 94% as we are porting our mortgage, if the house is valued with a 20k increase in 3 years (after spending arround 10k) we would then be borrowing 77%, this should reduce payments by over £100 each month so well worth paying for the valuation.

Thanks

[KDWALKERMS]

Hi,

Unless Lenders change the way they look at things over the next 3 years then it would be the value of the property in 3 years time. so yes could be worth looking at remortgaging or asking your current lender to look at a product switch. Please bear in mind that interest rates could start to increase over the next three years so the cost saving may not be as much as you expect and as you say house prices may reduce. Whatever happens always review your mortgage at the end of any tie in period.

Hope that helps.

[Sean Hughes]

When you come to the end of your deal, most lenders will simply offer you a deal based on the valuation you had three years ago. You can however insist on a valuation to be done for which the lender will most likely charge you. Do take into account that many Mortgage lenders tend to undervalue properties slightly. At the moment in terms of Mortgage rates the lower rates tend to begin from around 75% ltv