mortgage or remortgage?

piperh

We own a house which we are currently renovating and have gone over budget and funds are getting tighter. We have no mortgage and are wondering about the possibilty of borrowing against it. Would this be a mortgage or a remortgage? We are only talking about between €10,000 and €12,000 as ideally we want to be debt free.

unclebill98

The min amount for a mortgage is a lot more than 12k.

Some banks will at least need you to borrow 35-40k for it to be a mortgage.

However, some banks will do a home improvement loans for that amount up to a 10 years.

killers1

It would be considered as a mortgage as you are not paying off an exisiting lending company. You can get around the banks minimum lending requirement by borrowing whatever amount that is e.g. borrow €40k on a variable rate & oay off €32k the following day! This will ennsure you get access to the very cheapest homeloan rates available and aren't paying personal loan or home improvement rates..

chris85

OP you may be better off getting a personal loan for the amount you need.

The mortgage rates are cheaper but legal fees/valuations would make it more expensive for this balance.

unclebill98

killers1 wrote: »

It would be considered as a mortgage as you are not paying off an exisiting lending company. You can get around the banks minimum lending requirement by borrowing whatever amount that is e.g. borrow €40k on a variable rate & oay off €32k the following day! This will ennsure you get access to the very cheapest homeloan rates available and aren't paying personal loan or home improvement rates..

Yeah, as soon as you try that you'll get charged the interest they would have made. This is built into most if not all offer letters.

chris85

unclebill98 wrote: »

Yeah, as soon as you try that you'll get charged the interest they would have made. This is built into most if not all offer letters.

Havent seen it built in to most.

Under the Consumer Credit Act there can be no penalties for overpayment or early repayment on a variable rate product. However they can penalise under fixed rate products.

killers1

unclebill98 wrote: »

Yeah, as soon as you try that you'll get charged the interest they would have made. This is built into most if not all offer letters.

It's illegal for a bank to charge a penalty to pay off a variable rate loan early

unclebill98

Ops my bad.

No it's not, however I checked today before retracting my statement and there is a clause in newly issued mortgages covering off such loop holes. Doubt it's common however it does exsist.

As chris85 said, not exactly the wisest thing due to legal charges and as I stated, the op's amount is to low.

piperh

Thanks for the advice now i won't look a complete numpty tomorrow, we have an appointment with the bank tomorrow so we'll see what they say.