Releasing equity for renovation works

society4

Is it straightforward to release equity as part of a remortgage …..i]am looking to release about 150k (the works will be 200k)/have 50k to add to it. No structural work will be required.

will the bank require a detailed quote and release it upfront or in stage payments … any advice appreciated

Wheety

We've applied for a top up for an extension. We have 50k ourselves and looking for around 80k from the bank. Bank said we have to exhaust our share before drawing down the bank's money. Then it will be released in stages on a variable rate until we're finished drawing down and we can fix at that point if we wish.

That's AIB.

society4

Thanks that’s helpful to know …did you have to produce quotes and cert for any structural work etc. 1 rsj will be needed internally.

Wheety

We're only at the start of the process. They asked for a cost analysis to completed. Our architect has done this. I'll let you know more when I sit down at the weekend and go through their documentation.

society4

Thanks

Colm82

Did it with BOI last year, they will look for engineer sign offs on any draw down which they didn't tell us at the start or any way through of the application - we only found out as we were waiting for first payment to hit bank so we could start works.

We took down internal walls only and none were load bearing so we had no intention of using an engineer. Builder and architect both happy there was no issue with walls but bank would only accept engineer sign off for each stage. Cost us 3k we weren't planning on spending.

The bank will require quotes to the cent to match the new mortgage amount. It was a very frustrating process for us as we had different quotes from a builder, window manufacturer, kitchen supplier, well digger and solar panel company many who only gave rough estimates prior to completing the works but once the loan amount is applied for at the start we couldn't increase it. We were told by BOI we could apply for a second top up mortgage to make up the shortfall!!! In the end we completed the outstanding works from new savings this summer! Like wheety said we had to spend all our own money including contingency before bank would issue payments.

They looked for us to have 20% of the total works value in savings (as it was a second time mortgage) plus 10% contingency though this may change on recent central Bank rules.

Just an FYI it's not actually a top up of the original mortgage, it's a second completely separate mortgage with its own interest rates and timelines that uses your first mortgage as equity. It will need solicitor too for boi we used their internal solicitor for 600 euro rather than an external one.

I should point out we don't regret doing it in case I gave off the impression I do but definitely was not happy with BOI and their lack of flexibility and providing limited information.

Wheety

I keep thinking it'd be easier to just go to the CU but won't get circa 3-4% from them on a personal/home improvement loan. By taking it over 20 years, it'll be a much lower monthly payment which gives us a lot of flexibility. I'm hoping we get AIB's lowest rate so we can take advantage of their method for working out break fees and pay off more each month.

society4

https://www.boards.ie/discussion/comment/119834161#Comment_119834161

Hi, were AIB ok to deal with in releasing the funds in stages etc …any glitches..thinking of remortgaging with them to release equity .

mickie smyth

https://www.boards.ie/discussion/comment/119834358#Comment_119834358

HEY,

I found the bit here about it being a full new mortgage (including 20% deposit requirement) a surprise — though not really when I thought about it. I had spoken to BOI about a switcher mortgage which included money for a renovation. At the time they did say that quotes would be needed, and sign-off on stages would also be needed, but they implied it would be a single switcher style application. Does anyone know if maybe there are different rules for doing a top-up (2nd mortgage) with your own bank, versus switching over to a new bank?

Colm82

In my case the equity release was with my own bank - so the same bank for both mortgages. First mortgage was the one we got to originally buy the house in 2013, second mortgage (that then needed 20% deposit) was the equity release mortgage for the same property in 2021. I did originally contemplate switching banks and looking for an equity release from the new bank at the same time (basically a new mortgage with a value sufficient to pay off the original one and complete renovation works at the same time) but bank I asked didn't allow.

mickdw

I deal with alot of self build works as a supervising Engineer.

I find all this differs from bank to bank, differs depending on state of economy in general and also of course whether there is equity in the existing house.

If there is sufficient equity in the house as it stands, they should in theory release the funds and allow you to do whatever you wish with the money..... Things are tighter now though and the recent ones I've seen the banks have required Engineers costing and drawdowns etc even when the existing house without extension would cover all their risk.

Also banks differ re whether they need you to spend your own funds before drawing down..... It's pretty messy when they do as it tightens up the flow of money all through the job.

Wheety

https://www.boards.ie/discussion/comment/120047391#Comment_120047391

Hi

We haven't actually drawn down anything yet.

We moved out of the house, while the work is going on. This caused us delays in submitting everything. It's our own fault for not getting everything together in a timely matter. AIB now have all the documents, we're just waiting for the valuation to be done.

We paid the first invoice ourselves. AIB had said we'd have to spend our contribution before withdrawing from the mortgage. First invoice was a bit more than what we had said we'd spend ourselves but lucky we were able to cover it.

I'm expecting the 2nd invoice soon so hopefully we're not too far from getting the actual top up 🙄

Designator

Can someone help me with this . I’ve a mortgage the last 5 years on my own home and recently applied for equity release of €30,000 for renovation works . Bank of Ireland approved this in principle and told me I need a solicitor and underwriter now . Anyone know how I go about this? Who underwrites the loan? And what’s the cost of this?

Colm82

As you original mortgage is also with boi you can use their in house solicitor. Cost 600e when I did it last year. Not sure why they mentioned underwriter as surely that's on boi themselves. Maybe they meant engineer if any demolition works being done.

society4

https://www.boards.ie/discussion/comment/120087853#Comment_120087853

Can I ask how you dealt with contingency if you had to pay all your contribution up front and in relation to seai grants do the bank factor that into the loan I.e subtract it from the amount you will borrow? Thanks

Designator

My equity release mortgage is currently being reviewed by the underwriter , I applied for €30,000 and am just waiting for underwriter approval now. Already have a mortgage with BOI the last 5 years , a very small one . They have said nothing to me about a deposit of any kind for this , just that the loan amount is €30,000 over 25 years to match my current remaining mortgage length . Messaged them enquiring if there is a deposit required but surely they’d have told me by now

Designator

Also was told that the underwriter may require a cert of permanent employment , I was in permanent employment the last 10 years almost but 6 months ago changed jobs to join bus Eireann which have a year long probationary period so dunno if this will affect it also , the mortgage specialist at the bank told me it basically depends on the underwriter

theteal

Sorry to intrude but this all seems mad to me having done the same in the UK just over a year ago. It was our 2nd remortgage i.e. moving to 3rd bank, no top-up taken last time. This time we went 5 year @ .99% and requested £25k on top. This was a plucked from the sky estimate before we even spoke to builders. We were about £200k equity which is around 60% LTV which I'm sure helps a lot but we were asked for nothing of the sort above. It was a case of "how much do you want?", "OK, that's fine, sign here". I mentioned home improvement, they didn't care. No separate mortgage weirdness, just mortgage transferred from Natwest to Santander and the top amount to my bank account.

Designator

Just got correspondence this morning from BOI saying there’s no deposit required as it’s an equity release mortgage and my first mortgage is already with them , so they class it differently

society4

https://www.boards.ie/discussion/comment/120333407#Comment_120333407

Did you have to produce quotes/invoices/receipts for works you intend doing..? I think of it is under 65k they release the amt in full (no stage payments ) when you remtge…anyone know if that is the case …

society4

https://www.boards.ie/discussion/comment/120333407#Comment_120333407

Did you have to produce quotes/invoices/receipts for works you intend doing..? I think of it is under 65k they release the amt in full (no stage payments ) when you remtge…anyone know if that is the case …

Designator

https://www.boards.ie/discussion/comment/120625149#Comment_120625149

Yeah Im only getting 30K from them on top of my original mortgage, they dont need any deposit or quotes or invoices or anything, just the usual paperwork for getting a mortgage and they release the funds in full