We are very fortunate to have finally finished the extension work on our house. So I have taken the opportunity to get the house valued and with the new value we will have a much higher proportion of equity value. Which should equal a better mortgage rate.
So the good news is that our house has been valued at £110k more than it was worth 6 months ago. Considerably more than we spent on the extension so we are really happy. My hubby did a great job in project managing the extension and we’ve ended up with a great living space. But our immediate thoughts were blimey maybe we can sell it and maybe reinvest in another house with a bigger garden (for the 3 boys and football!) and maybe get a bit bigger a house for a bit more money. Surely the bank will lend us more considering the equity we have built up??
I bank with First Direct and our existing mortgage is with them too. I called them last night to find out how much additional borrowing we could apply for..to help make the moving house decision easier.
Then the 100’s of questions started and 1 hour on the phone just for a pre-application! So changes to mortgage applications came in a few weeks ago and because its early days the mortgage companies are being ultra cautious. I had to declare every single regular expense before they will consider affordability to repay a mortgage.
So I had to declare..
1) Firstly basic income only, they will not take account of any bonuses.
2) Existing credit card debt for hubby and me, despite it being on 0% deal
3) Childcare costs, a biggy for me at around £1000 per month
4) All utilities, gas, electricity, water, phone, broadband, council tax, mobile phones
5) All insurances, life, health, car and home insurance
6) Gym membership, contact lenses
7) Oh and how can I forget food shopping.
So after all of this I’m told we can only actually borrow an additional 40k on top of what we already owe.
Decision made we are staying put:-) And maybe now we knock down the garage/ or turn it into a play type room.
I also asked what the impact on our additional borrowing would be if we didn’t have £1000 per month childcare to pay. Apparently we would be able to borrow an additional £140k rather than £40k. One day my childcare bills will reduce, but with the youngest being 18 months, not quite yet.
So we are staying put in our newly extended and sparkly new house and I will re-mortgage, but maybe not with First Direct. They are so busy that they can’t offer me a consultation appointment to discuss rates with me until 3rd June. Bad service First Direct. I shall be making a complaint about that.