Finance for large extension....
Discussion
We will be starting a large extension/house remodel in the spring, and have already obtained planning permission.
I will be doing the bulk of the work, alongside my soon to be retired site manager father-in-law. Therefore, we're going to be able to do it pretty cheaply.
I'm thinking of a sum around the £60k mark.
There's a possibility that we'll be able to borrow the money from both sets of our parents, with a view to paying them back once finished and re-mortgaged.
I'm presuming that doing the build without involving any lenders until after it is finished will put us in a better position regarding mortgage deals as the LTV will be less?
Anything wrong with what I'm planning on doing?
Cheers
I will be doing the bulk of the work, alongside my soon to be retired site manager father-in-law. Therefore, we're going to be able to do it pretty cheaply.
I'm thinking of a sum around the £60k mark.
There's a possibility that we'll be able to borrow the money from both sets of our parents, with a view to paying them back once finished and re-mortgaged.
I'm presuming that doing the build without involving any lenders until after it is finished will put us in a better position regarding mortgage deals as the LTV will be less?
Anything wrong with what I'm planning on doing?
Cheers
IMO no, I'm currently doing the same but with interest free credit cards as I have no parental help. Plan is to remortgage to clear balances after (LTV should go from 90% - 70% due to scope of works). Also helps that I'm comfortably in the affordability limits though (but borrowings are just under 50% of yours).
Sounds reasonable to me.
We extended ours back in 2010 and used a combination of extending the mortgage with a home improvement loan and some of our own cash, probably about 50:50 by the time you took all the fixtures and fittings into account. Problem is getting a lender to up the value of your house based on the work you've done, we tried to when moving our mortgage to HSBC but we couldn't get them to send anyone out, they just valued it on the market prices round the area which fortunately was enough in terms of LTV to get the deal we wanted.
However we subsequently applied to HSBC to extend the mortgage further to do a loft conversion. After going through a lengthy process we got "computer says no" due to the increasingly tough lending criteria they now have to apply. It was rejected due to affordability which I found quite absurd give that the increase to the monthly payments would have been less than £100. So tread carefully as you may do the work but get your mortgage increase turned down leaving you in a lot of debt to your parents. Luckily for our loft the bank of Mum and Dad were able to help us out with a loan with an indefinite repayment period (he's been trying to off load some money onto us to reduce inheritance liabilities).
We extended ours back in 2010 and used a combination of extending the mortgage with a home improvement loan and some of our own cash, probably about 50:50 by the time you took all the fixtures and fittings into account. Problem is getting a lender to up the value of your house based on the work you've done, we tried to when moving our mortgage to HSBC but we couldn't get them to send anyone out, they just valued it on the market prices round the area which fortunately was enough in terms of LTV to get the deal we wanted.
However we subsequently applied to HSBC to extend the mortgage further to do a loft conversion. After going through a lengthy process we got "computer says no" due to the increasingly tough lending criteria they now have to apply. It was rejected due to affordability which I found quite absurd give that the increase to the monthly payments would have been less than £100. So tread carefully as you may do the work but get your mortgage increase turned down leaving you in a lot of debt to your parents. Luckily for our loft the bank of Mum and Dad were able to help us out with a loan with an indefinite repayment period (he's been trying to off load some money onto us to reduce inheritance liabilities).
Thanks all.
Yes, the obvious concern is that, once completed, I can't get the required additional amount due to affordability rules.
At the moment my mortgage LTV is around 56%.
If we borrow an additional £60k, with the extra value added to the house, I would imagine our LTV would actually drop to less than 55%.
Yes, the obvious concern is that, once completed, I can't get the required additional amount due to affordability rules.
At the moment my mortgage LTV is around 56%.
If we borrow an additional £60k, with the extra value added to the house, I would imagine our LTV would actually drop to less than 55%.
Storer said:
Has it occurred to actually talk to the bank first. Get a feel for how they see what you are doing.
If all else fails. Build it and find a new mortgage with a different lender.
Not something I really want to do as the bulk of our existing mortgage is 0.37% above base..... currently paying 0.87%!If all else fails. Build it and find a new mortgage with a different lender.
audidoody said:
Wouldn't this be flagged on your credit file after the first personal loan? Would you even get a personal loan runs longer than five years? You'll be paying more than £1,200 a month for five years.
They do go further than 5 years I think 7 or even 10 years or longer is available. Gassing Station | Finance | Top of Page | What's New | My Stuff