Refinancing

[Hector]

Just wondering how this works! We only got our loan in August this year but managed to get almost $10K off the asking price as the house needed some work (restumping). In order to do this we figured we would refinance our loan and add the $10K to it.

Is this possible or am I imagining that the bank would let us do this?

Also: is it possible to do at any stage (ie; in the first year of the loan?).

Secondly, is it possible to refinance with another lender at such an early stage?

Thanks!

[andie_pandie]

Hi Hectoretta lol - guessed a alias was in play.

With regards to adding onto your mortgage in such a short space of time, it is quite difficult. The bank that you went with knows how much you paid for it and it is possibly the same amount someone else would have paid due to the need for work.

If you got quotes for the work that needed to be done and if the work actually added value to your property then it could be worthwhile, these sort of improvements that add value are things like bathrooms, kitchens etc. With restumping it may not add to much more value, it really depends on the valuer if they deem so.

Also another problem is when it comes to doing any sort of add loan or debt consolidation loan they generally want a little equity in the property. Some banks want between 10-15% equity including the extra amount to borrowed.

If you originally put quite a sizable deposit down then you may already have enough equity in the property to be able to do a increase to your home loan.

If you would like to discuss privately just pm me as I am happy to discuss offline for you. I hope I have not upset the apple cart here.