Increasing Mortgage

C

CurMoo

Guest
Hi,

I'm getting married :) and I'm hoping that our Mortgage provider will allow us to put the cost of the wedding onto my mortgage.

I am doing this so I don't have to save for years, (I know that's bad) but also so we can get things rolling as quick as possible.

Basically, my mortgage details are:

House value is probably >300,000 (similar sold for 365 recently)
19 years remaining, 100,000euro left to pay
Salary >45,000euro
I would be hoping to increase the mortgage by 30 - 35000

Do you think there would be any issues?
Do mortgage providers have issues with increasing mortgages for these sort of reasons?
Also, would I have to go through the whole process again that I did 6 years ago of applying for the mortgage, waiting for approval etc, or is a remortgage arranged differently?

Also, I read the thread in a different forum on here about the price of weddings and people are nuts etc. and while I agree in principle, we thought about it an want to do everything to make sure we will never look back on our wedding day and say, things like, I wish we had a hot food instead of cheese sandwiches for the dinner

Thanks,
CurMoo
 
Hi Curmoo,
You would be OK for a remortgage given your loan to value ratio - however if I were you I would be reluctant to remortgage just to pay for the wedding.

30 - 35000 over 19 years would be a more expensive loan than some of the short term offers that are available.
Do you have any savings???
 
Hi CurMoo,

Congrats on your engagement!

Would you consider taking out a personal loan instead of putting it on your mortgage. For example, I think Tesco loans have a good fixed rate and you could say take out 30,000 with them and pay it back over ten years. I believe you can also buy back these loans if you find yourself with the cash in a few years. This may be a better option for you.
 
I disagree with deedee80. A mortgage topup that you repay (by initial agreement or just unilaterally through accelerated lump sum and/or regular capital repayments) over a similar term to an unsecured personal loan will almost certainly work out cheaper. On the other hand paying for the wedding over a few decades rather than a few years may work out a lot more expensive than a personal loan even if the monthly repayments are lower.

Bear in mind that you cannot claim owner occupier mortgage interest tax relief on interest charged on the topup unless it is used to purchase or renovate your home. If a topup is used to pay for a wedding then you cannot claim relief on that.
 
Hi Curmoo
I think some of the posters above have gone off topic, from reading your original post you asked 3 questions, none of which involved the merits of a mortgage over a personal loan. I will attempt to answer your actual questions as follows:
Q: Do you think there would be any issues?
A: Assuming you are still young (i.e. <50) with no other major outgoings (i.e. car loan, seperation maintenance etc) then you should have no problem securing the mortgage top up from an affordability point of view.

Q: Do mortgage providers have issues with increasing mortgages for these sort of reasons?
A: No, the majority of lenders will have no problem with providing a top up of hat size for the purpose of paying for the wedding - as long as affordability and LTV (loan to value) are ok - and they look ok for you

Q: Also, would I have to go through the whole process again that I did 6 years ago of applying for the mortgage, waiting for approval etc, or is a remortgage arranged differently?
A: If you switch mortgage provider then yes, you will have to go through the same process as when you took out the mortgage originally. However most lenders when approving top up's for existing clients will usually just require up to date bank statements and salary slips as well as permission to do a fresh ICB - not a very taxing set of requirements, so the process would be much shorter than your previous experience

Hope this helps.

M
 
The mortgage provider will also require you to increase your life insurance to cover the value of the new loan. You may have to take out new insurance to do this (i.e. cancel the old one and start a new one), or take out a second policy as some policies don't allow you to increase the amount covered.
 
Mortgageman said:
Hi Curmoo
I think some of the posters above have gone off topic, from reading your original post you asked 3 questions, none of which involved the merits of a mortgage over a personal loan. I will attempt to answer your actual questions as follows:
Q: Do you think there would be any issues?
Click to expand...
A relevant issue here is that paying the topup off over the full remaining term of the mortgage will most likely be a very costly way to pay for the wedding.
 
You could remortgage but take the top up over a shorter term subject to your lender agreeing to same and subject to your personal circumstances.
 
deedee80 said:
Hi CurMoo,

Congrats on your engagement!

Would you consider taking out a personal loan instead of putting it on your mortgage. For example, I think Tesco loans have a good fixed rate and you could say take out 30,000 with them and pay it back over ten years. I believe you can also buy back these loans if you find yourself with the cash in a few years. This may be a better option for you.
Click to expand...

Tesco will only allow loans for home improvements to be paid back over more than 60 months - 60 months is the max for any other purpose.
 
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