Top Up Advice Needed

My wife and I need to borrow about 25k for house renovations and are going to look at topping up our mortgage to do so.

Our house is worth about 490k, we owe 200k on the mortgage for it.

We previously topped up by 40k about 2 years ago, for home improvements, but most of that money went on our wedding and other expenses.

My wife and I are both self employed.

Is it likely that the bank will approve the loan based on the above information? What other factors might come into it?

Is there a better/more sensible way of doing it? Should we use a mortgage broker we know rather than approach the bank directly?

Lots of questions! Any advice would be much appreciated!

buyaka said:

We previously topped up by 40k about 2 years ago, for home improvements, but most of that money went on our wedding and other expenses.

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Bear in mind that unless you accelerate repayment of this topup then you will be paying for your mortgage for the next few decades!

In my experience, bankers are reasonable people and appreciate it when people are direct with them. Why don't you just explain everything honestly to your bank manager in person? You could suggest giving receipts to them for all the renovations.

Was it a stipulated requirement that the previous top-up would be used for the specific purpose of home improvements?

Yeah they asked us for a detailed quotation, which we had because we genuinely borrowed the money for home improvements.

Some of it was used to by furniture etc, but the original quotation which we gave the bank wasn't followed through with the contractor.

Also bear in mind that you cannot claim mortgage interest relief on the topup that was used to fund your wedding and other expenses and not used to purchase or renovate your home.

Is it likely that the bank will approve the loan based on the above information? What other factors might come into it?

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It is likely they will take into account what they see as your borrowing pattern. As another poster pointed out they may also make it a condition of the offer than you provide building certs etc for work carried out this time.

It will depend on your salary and repayment capacity rather than just your LTV.

Could someone tell me what our new monthly mortgage payments are likely to be based on the figures provided in my initial post?

All help greatly appreciated .... I'm hopeless when it comes to this kinda thing!

Buyaka,

Generally if you can afford to repay the loan, the banks will loan you the funds.

If you're thinking of topping up, you should also look at the possibilty of switching bank for a better rate. As your loan to value is under 80%, you would be eligible for some of the best rates in the market. YOu may want to speak with a broker for this reason.


The repayments depend on the term of the loan and the interest rate.

You can check the repayments yourself here:
http://www.jeacle.ie/mortgage/