Case Study –Restructuring an Existing Mortgage and Raising Capital for Home Improvements

The Situation

A longstanding client approached Henry Dannell to review their existing mortgage and raise additional capital to fund improvements to their home.

Rather than considering the capital raise as a standalone requirement, we reviewed the client’s existing borrowing alongside the additional funds required and explored a range of potential refinancing structures.

The objective was to identify an appropriate solution that addressed the existing mortgage while accommodating the client’s plans for the property.

The Challenge

Raising additional capital as part of a remortgage can require careful lender selection, particularly as lenders may take different approaches to the intended use of the funds. The client's existing mortgage position added a further consideration. Timing was important, as the client was on their existing lender's higher Standard Variable Rate while the refinance was being arranged. The challenge was therefore to identify a lender whose criteria could accommodate the proposed capital raising while also ensuring the refinancing process was managed with the client's existing mortgage position in mind.

The Solution

We reviewed several potential mortgage structures before identifying a lender whose approach was appropriate for the client's circumstances and intended use of the additional funds. The selected lender was able to accommodate the capital raising requirement, allowing the client to refinance their existing mortgage while releasing the additional funds required for the planned home improvements. The application progressed smoothly through underwriting, with the timing of the client's existing Standard Variable Rate position considered throughout the process. The result was a remortgage structured around both the client's existing borrowing and their plans for the property, rather than treating the additional capital requirement in isolation. The case demonstrates why a remortgage involving capital raising can require consideration beyond the headline mortgage rate. Lender criteria around the purpose of the additional borrowing, alongside the client's existing mortgage position and the timing of the transaction, can all influence the overall structure. Please note: A mortgage is secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Additional borrowing will increase the amount secured against the property and may increase the total amount repayable.