Should you take out a second mortgage?

Q I currently live in a house that has a very small mortgage compared to its value. I intend to have an extension built to the property and need a loan for this. The value of the loan plus the mortgage will still be less than the value of the property.

Is it possible to arrange the loan as a second mortgage on the property or do I have to extend or replace my current mortgage if I want to go down the mortgage route?

PoS

A The value of the property is not the only criteria considered by mortgage lenders. They also normally like to know your income to reassure themselves that you can handle repayment of the loan.

There is nothing to stop you taking out a second mortgage, although the lender will take into account that you already have a prior commitment.

The easiest and cheapest way would probably be to approach your existing lender and ask for a larger loan. You might be able to avoid having to pay valuation and legal fees, since they already know the property.

Alternatively, you could shop around for the best remortgage bargain - many lenders waive the valuation and legal fees while still offering good terms.

Mortgages are a competitive market and now is quite a good time to consider getting a bargain deal before interest rates start to move up. However, check first that you wouldn't have to pay severe early withdrawal penalties if you changed from your existing lender.