Remortgaging and increasing term by another 12 months ?

[Markdtt12]

My IP wants me to remortgage and possibly increase my term by another 12 months if i cannot obtain a remortgage? Is this the norm?

[Foggy]

Hi. Generally, yes, depending on what was originally written in to your proposal. In modern times, this has become fairly standard procedure. At the moment it is impossible to remortgage and, often, the 12 month extension works out in your favour ( remember a remortgage will commit you to a higher interest rate over a much longer period).

[plasticdaft]

Yes it pretty much is standard practice these days. Only usually if more than 5k equity exists.

Paul

[soreloser]

If you have a loan secured on your house then does this count against any equity when calculating whether you are going to have to serve a further 12 months?

[kallis3]

Hi,

The mortgage and secured loan will be taken into consideration - it's what's left after the amount you owe to them that is your equity.

[soreloser]

That'll be a big minus then if I ever get there...

Probably no additional year then?

[Tina Shortland]

And remember the creditors only look at 85% of the value of your house before taking away any secured debts away frmo it so an even bigger minus figure by the sounds of it. Who knows what will happen with the housing market but it will need to be a miracle for there to be such a leap. Keep your eye on house prices in your area throughout the term though so you have an idea as things move forward.

Regards,

Regards,

[kallis3]

I have a mortgage and a secured loan. Personally, I know I will have to carry on for the extra year as there is more than enough equity.

When it gets closer soreloser then you'll have to get a valuation and then speak to your IP and they will let you know if you need to try and remortgage although, as Tina says, the housing market is unlikely to have altered much in the next few years.