Remortgaging - what's involved & where to start?

Hi,

We’re looking to remortgage our property to cover a budget overrun in renovations and an extension and despite some searches here I’m not sure on what’s involved or where to start.

Originally took out a 35 year mortgage with Bank of Ireland 2 years ago for $362,500 – drew $347,500 down back then with the remainder to be drawn down upon architect sign-off of the renovations and finished extension (paid the mortgage stamp duty on the $362,500 amount). Only finished now and budget has overrun a long way due to increasing the scope of the work along the way, so we now need to increase the amount to $390,000. Our 2 year discount rate with BoI has expired and they’ve put us on a terrible rate, which we definitely will push back on, but wanted to roll that negotiation into the remortgage exercise.

The house is now easily worth over $500,000 so 390k would be 78% LTV. Combined earnings between me and gf (both 26 and on deeds and mortgage) is around €88,000, with strong future earning growth potential. Gf earns substantial overtime in health sector but can no longer get an official letter guaranteeing it, though her P60s will show it as constant ove 3 years. No other loans (besides $1,000 outstanding on a car loan which will be paid off this week).

What is involved in remortgaging and does it seem like the right approach here (hopefully won’t need the full 390k so would pay off leftover straight away, and salaries should grow quickly allowing us to pay off mortgage ahead of schedule)? What fees and timelines are involved and should we consider changing mortgage provider to get a better rate (BoI offered my sister ECB +0.85% for lifetime of mortgage and our finances are stronger so would expect at least that rate) and try get fees paid for?

Thanks for any advice offered.

Instead of re-mortgaging have you thought of just getting a top-up onto your existing mortgage with your current provider? Not sure, but would have thought that it would be less expensive in the long run. Re-mortgaging could involve legal fees, etc, (if you change your provider) and would take roughly 4-8 weeks to get approval whereas, your current provider is aware of your income, expenditure, credit history etc. and should be able to accommodate you without too much hassle. Don't forget to increase the value of your house insurance too.

Thanks ACA, though I think I may have read something about a mortgage top-up being charged at higher interest rate meaning it would be quite expensive in the long run - does that sound right?

Mortgage top up wouldnt necessarily be charged at a higher rate.

A top up is usually cheaper and quicker because there is no solicitor involved and the money is released directly to you. Some banks do them without any problem, some don't.

However if you are already unhappy with your rate then may be in the long run you would be better off remortgaging to get the full amount at a lower rate. While remortgaging can involve solicitors/outlays etc there are quite a few banks now offering €1000 towards legal costs or even no legal fees etc. Realistically if I were in your shoes, and providing you would have no difficulty getting the amount based on your income, I would be shopping around for the best rate. Have you looked at the best deals out there? Like NIB/ Bank of scotland and others? Then as a secondary issue see what they will offer as regards legal fees and so on.

If you are unhappywith your current interest rate and are going to require additional funds then you should strongly consider switching. Many lenders now pay legal fees for customers who switch to them and [broken link removed]are now even offering €1,000 in addition to covering legal fees for customers who switch to them and take up their U First Mortgage (ECB + .75%). Bear in mind though that their is a U First membership fee of €9 per month.


I should have also mentioned that with most lenders if you repay your mortgage within 5 years you will have to repay the legal fees.

Thanks folks.

I've emailed our broker outlining our plans and suggested that I hope they can at least match the Ulster Bank rate to ensure we stay with them.