Can I re-mortgage?

[Charlotte81]

Hi everyone

 

I am new to this site and I have joined looking for some help if possible? I have 2 buildings on my piece of land, one of which is a double garage with a 1 bed holiday let above which is complete and a separate 4/5 bed detached house which is almost at the wind and water tight completion stage. We have had every draw down to its current stage but unfortunately now at a point that funds have depleted and the additional draw downs would take the mortgage payments to a level which would not be financially comfortable. So my question is, is it possible to re-mortgage (our current valuation at completion is considerably more than when we first started this build in 2009!!)

[MikeSharp01]

What sort of a mortgage do you currently have? 

[Charlotte81]

11 hours ago, MikeSharp01 said:

What sort of a mortgage do you currently have? 

Its a stage release self build, interest only mortgage

[epsilonGreedy]

What are you hoping to gain through the remortgaging process? I am confused since you state you do not wish to further extend your current self build mortgage and yet you cite an expected higher final valuation which sounds like the logic used to take on a larger mortgage.

 

Presumably a single land title includes the finished garage with holiday let and the part-complete house in which case the present self build mortgage company will view the garage as part of their security. Is the holiday let fit for your personal habitation needs?

[Temp]

15 hours ago, Charlotte81 said:

the additional draw downs would take the mortgage payments to a level which would not be financially comfortable. So my question is, is it possible to re-mortgage (our current valuation at completion is considerably more than when we first started this build in 2009!!)

 

So you hope a remortgage would be at a lower interest rate than your existing mortgage?

 

Where are you living at the moment? Are you living in the holiday let?

[Charlotte81]

Thanks for your response. I am looking at a reduction in interest rate which will make the monthly repayments much more affordable and thus we would be able to afford some additional borrowing.

 

The holiday let is being used as our current accommodation.

[ragg987]

Just a thought, as mortgages for self-build are much more expensive than for homes, could you max the mortgage to your "current home" (holiday let) and then reduce the borrowings against the build? This might work if they are considered to be separate properties. i.e. treat as 2 properties with separate mortgage arrangements.

 

I have not tried, but I suspect shifting a mortgage to another lender on a partially built property could be tricky.

[Charlotte81]

24 minutes ago, ragg987 said:

Just a thought, as mortgages for self-build are much more expensive than for homes, could you max the mortgage to your "current home" (holiday let) and then reduce the borrowings against the build? This might work if they are considered to be separate properties. i.e. treat as 2 properties with separate mortgage arrangements.

 

I have not tried, but I suspect shifting a mortgage to another lender on a partially built property could be tricky.

Although they are 2 separate buildings they both fall under the same mortgage.  I think this is going to be a lot harder than I first thought!

[epsilonGreedy]

50 minutes ago, Charlotte81 said:

The holiday let is being used as our current accommodation.

 

 

I would have thought that the income from a lettable holiday property would more than offset some extra borrowing to get the main house to a weather tight shell where you can then camp out. Are you subject to the additional pre habitation checks applied by building control in Scotland?

 

15 holiday weekly lets should produce a profit of £5000 annually providing the cost of creating a desirable holiday location is not crippling.

[ragg987]

Why not ask your current lender if they are willing to split it into 2 mortgages? I suspect this would only be feasible if these are considered separate properties - e.g. you can sell one and not the other.

 

One advantage with using your existing provider is you may be able to avoid application and similar fees, which can be substantial.

[MikeSharp01]

There might be a route through this but you need to find a way to fund the finish of the main house. Maybe find a zero interest credit card or two. Once the build is complete, to an acceptable standard, you can remortgage and / or perhaps your current lender would reduce the interest rate naturally as thus feature is built into some self build products.

[MikeSharp01]

P's sorry meant to add that you could use the CC to cover the additional repayments on the final drawdown so that you can eat!