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Home Loan Question
7 replies to this topic
Posted 23 July 2008 - 02:16 PM
I'm hoping someone here can help answer a question.
I have a home loan for a house I bought last December. We need to do some renovations on the shed so that my DP can do some work from home. I also need to get rid of my credit card debt. I was reading yesterday that it is possible to increase your home loan amount in order to do renovations or consolidate your debt (by adding enough to cover the renovations and paying off my credit card). Does anyone know if this is true for all banks?
Can anyone give any extra advice on the subject?
I really need to reduce the amount I'm paying each month, not add too much more to it by getting a personal loan.
Posted 23 July 2008 - 04:25 PM
I think most banks will do let you do it. I don't think that it can be done if you are on a fixed loan though.
We refinanced our home loan a little while ago to renovate bathroom and kitchen. They revalued our house to make sure that we were not borrowing more than the property was worth.
Posted 23 July 2008 - 04:29 PM
I'm guessing most would do this.
We did it late last year with our loan. Borrowed a bit extra to pay off a car loan & also to landscape some of the yard.
The extra fees were a bit of a pain but now we're only paying one lot of interest
Posted 23 July 2008 - 06:22 PM
If you only bought the house last year I doubt that you would have enough equity to do that just yet. Unless of course the value of the house has gone up considerably since last Dec when you bought it.
You would have to make an appointment with your bank manager to discuss this. No-one here could possibly answer your question without knowing loan amounts, valuations, location of the property etc..
Posted 23 July 2008 - 07:24 PM
Lizz - I suspect you're right. I wasn't sure if this type of adjustment would be based on the amount of equity on the loan or if we would require another valuation.
I know I didn't give enough detail to get a detailed answer, I was just after a general feel for it before I go enquiring at the bank.
Thanks again everyone
Posted 23 July 2008 - 11:09 PM
If it assists.. I am a home loans assessor for a bank.. basically if you have some equity you can increase all you like..to of course a certain extent.. if mortgage insurance is to be involved..they will usually allow you on what they call a 'cash out' to 90% lend of your property value.When the deal is submitting and if you are borrowing more than 80% they will conduct a ful valuation on your property again anyways.
As far as your loan an increasing it.. for some reason people only think you are only allowed one loan only for a home loan.. so basically if you have a fixed rate loan...not a problem.. dont touch that one ..but have them just do another 2nd home loan against your property.. just perhaps a smaller variable type loan.. many people have numerous loans on their property for different purposes..ie.. 1 may be an equity line...1 may be a fixed portion and 1 may be a variable P & I portion.. so dont ever think if you have a fixed loan that you cant take a separate loan against your property..
Hope that helps!
Posted 24 July 2008 - 06:30 PM
Hey MrsJ - interesting stuff!! Thanks for that info.
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