Remortgaging for extension

The chan chan man

Hi,

I’m looking to remortgage for a tiny kitchen extension. The bank want me to jump through hoops, getting architect/engineer to issue Stage payment certs etc throughout the work so they’ll issue the money in stages. I just want to get a builder in, a simple kitchen extension.

Someone told me if I’m remortgaging for less than €50k then i don’t need to do all this and the bank will just release the money in one lump. Is this true? Is it written anywhere?

Thanks!

Potatopie

The chan chan man wrote: »

Hi,

I’m looking to remortgage for a tiny kitchen extension. The bank want me to jump through hoops, getting architect/engineer to issue Stage payment certs etc throughout the work so they’ll issue the money in stages. I just want to get a builder in, a simple kitchen extension.

Someone told me if I’m remortgaging for less than €50k then i don’t need to do all this and the bank will just release the money in one lump. Is this true? Is it written anywhere?

Thanks!

Hi.
There's another type of loan you can get. I think it's called a loan-to-value.
So you have a valuer assess how much value your extention will add to your house and then you can borrow up to that amount.
I'm probably not helping much but I'm with BOI and I called them last week to discuss a remortgage for extension and the lovely lady was so helpful and talked me through all my options. I can get you her name if you're interested.
I won't be doing anything for a while yet but it was great to know exactly what the bank ewill need when the time comes.
Also, I won't have enough equity in the house to be released for a remortgage.

phormium

A remortgage usually means taking out a brand new mortgage and clearing off the old one and carries all the requirements of a brand new mortgage, legal fees/valuation etc.

A Top Up mortgage is usually a second mortgage that runs alongside the original loan term and doesn't affect the original mortgage and is usually just paid out without other requirements. These are limited normally to a lower amount, UB used to be 65k

Now where it can get messy is if there is actual building work as opposed to just a spruce up of existing building, planning permission then can be an issue or compliance certs etc, having said that you should get all of these anyway even if no mortgage involved. I built a small kitchen extension lately, did not need to go near bank but got engineer to supervise and provide relevant certs etc should I ever need to sell.

What you want is a Top Up if your bank does that type of system but if they now know what you are actually doing so kind of too late to tell them it's just a revamp of kitchen!

Also is value catching you out? Top Ups are usually only given where the total overall loan to value is not over 80% (may be lower these days I don't know) so where the total loan is going to go over whatever the banks threshold for a Top Up you have to go down the remortgage route and therefore because of the excess over the threshold value they will only do stage payments releases as the value of the house increases as the work gets done.