Top Up Mortgage to Buy Site

We are in the middle of gathering together all our bits and pieces to change to NIB's 2.79% tracker mortgage. We had intended to only take out the new mortgage with NIB for the amount outstanding on the old mortgage (115k) with ICS. Our house is currently worth ~210k. Fine.

We have since spotted a 2 acre site for ~43K. Unfortunately, we don't have this kind of cash in our back pocket and would need to borrow that amount. Considering a combined income of 75k, I don't think we would have a problem re-mortgaging for ~160k. However, my question is, would NIB (or any bank) allow us to take out the extra money in order to purchase a site, rather than the usual home improvement reason? Would they give us the full value of the site?

Lots of lenders will give you an equity release - without any explanation for its purpose. You could do that?

Hi

lenders will normally allow you to release up to 85% of the current value of your home to redeem existing mortgage and release equity for other purposes such as purchase of a site, a couple of lenders will go to 90%, so if your property is worth €210k, max on 85% is €178,500 less the €115k back to ICS leaves you with sufficient equity to purchase the site, your loan to value will be 76% ie €160k versus €210k

regards
Deirdre L
leonard@rea.ie

Thanks for your replies Munsterdude and DeirdreL.

Just another few questions.

Is it possible to switch mortgage providers and do an equity release at the same time? Or should we do an equity release with our current provider and then switch to a cheaper provider later?

Is a solicitor needed for an equity release?

Also, how much would the solicitor fees be for buying a site? (I'm trying to work out how much all of this is going to cost us.)

Thanks
FiveFingers

Yes you can borrow extra while simultaneously switching lenders, but as the overall Loan to Value will be >60% I don't think you'll get the NIB 2.79% Tracker rate. NIB are unlikely to take the value of an undeveloped site into their calculations and will just use the value of the house, so you may have to look around for the next-best tracker.

Yes there will be a fee for the legal work on (a) switching your mortgage and (b) buying the site. You can use a title insurance company www.quickswitch.ie to keep the costs of the re-mortgage down to €999 but you'll still need a solicitor for the site purchase.

Liam D Ferguson
www.ferga.com

yes it is possible to switch and do the equity release with another lender rather than get the top up from your existing lender and then switch, you cut down on legal costs and outlays, as to how much a solicitor would charge for the purchase of a site, I'm sorry I have no idea, but would hope it would be no greater than €700 to include any outlays