Funding an extension
Discussion
Looking for some advice on the best way to fund an extension.
We have a 3 bed Semi in a good location that we would ideally like to extend. We have space on the side and at the rear and to extend based on current m2 values would be around £55-60000.
We are fortunate to live in the North where values are relatively low. We bought for £165k 4 years ago, have a £120k mortgage with 2% above base rate mortgage on 80k of it and a ported mortgage of 1.9% on the other £40k. House prices have crept up a bit and we have made some improvements to the house (new kitchen, bathroom, staircase, new windows, internal doors, garden all done) and I would envisage it selling for £185k based on similar properties.
Its currently mortgaged for £190k so assume gives us £70k in equity? Nationwide have never sent anyone to see the house, just based it on local prices and what we have done to it.
I am looking at the best ways to fund the extension. Historically, we are both risk averse, tend not to buy anything with credit unless its on a 0% card and only have the mortgage as debt. While we could wait to save another 5 years, I am of the opinion to get it as soon as possible, to enjoy it for as long as possible.
I'm looking at getting approx £25k in savings together but still leaves a £25k-30k shortfall. Jointly, we earn around £63k. What would be the best way to go about it? In an ideal world, I'd save for the lot but thats going to be another 10 years down the line!
We have a 3 bed Semi in a good location that we would ideally like to extend. We have space on the side and at the rear and to extend based on current m2 values would be around £55-60000.
We are fortunate to live in the North where values are relatively low. We bought for £165k 4 years ago, have a £120k mortgage with 2% above base rate mortgage on 80k of it and a ported mortgage of 1.9% on the other £40k. House prices have crept up a bit and we have made some improvements to the house (new kitchen, bathroom, staircase, new windows, internal doors, garden all done) and I would envisage it selling for £185k based on similar properties.
Its currently mortgaged for £190k so assume gives us £70k in equity? Nationwide have never sent anyone to see the house, just based it on local prices and what we have done to it.
I am looking at the best ways to fund the extension. Historically, we are both risk averse, tend not to buy anything with credit unless its on a 0% card and only have the mortgage as debt. While we could wait to save another 5 years, I am of the opinion to get it as soon as possible, to enjoy it for as long as possible.
I'm looking at getting approx £25k in savings together but still leaves a £25k-30k shortfall. Jointly, we earn around £63k. What would be the best way to go about it? In an ideal world, I'd save for the lot but thats going to be another 10 years down the line!
Chicken Chaser said:
Looking for some advice on the best way to fund an extension.
We have a 3 bed Semi in a good location that we would ideally like to extend. We have space on the side and at the rear and to extend based on current m2 values would be around £55-60000.
We are fortunate to live in the North where values are relatively low. We bought for £165k 4 years ago, have a £120k mortgage with 2% above base rate mortgage on 80k of it and a ported mortgage of 1.9% on the other £40k. House prices have crept up a bit and we have made some improvements to the house (new kitchen, bathroom, staircase, new windows, internal doors, garden all done) and I would envisage it selling for £185k based on similar properties.
Its currently mortgaged for £190k so assume gives us £70k in equity? Nationwide have never sent anyone to see the house, just based it on local prices and what we have done to it.
I am looking at the best ways to fund the extension. Historically, we are both risk averse, tend not to buy anything with credit unless its on a 0% card and only have the mortgage as debt. While we could wait to save another 5 years, I am of the opinion to get it as soon as possible, to enjoy it for as long as possible.
I'm looking at getting approx £25k in savings together but still leaves a £25k-30k shortfall. Jointly, we earn around £63k. What would be the best way to go about it? In an ideal world, I'd save for the lot but thats going to be another 10 years down the line!
Further advance from Nationwide?We have a 3 bed Semi in a good location that we would ideally like to extend. We have space on the side and at the rear and to extend based on current m2 values would be around £55-60000.
We are fortunate to live in the North where values are relatively low. We bought for £165k 4 years ago, have a £120k mortgage with 2% above base rate mortgage on 80k of it and a ported mortgage of 1.9% on the other £40k. House prices have crept up a bit and we have made some improvements to the house (new kitchen, bathroom, staircase, new windows, internal doors, garden all done) and I would envisage it selling for £185k based on similar properties.
Its currently mortgaged for £190k so assume gives us £70k in equity? Nationwide have never sent anyone to see the house, just based it on local prices and what we have done to it.
I am looking at the best ways to fund the extension. Historically, we are both risk averse, tend not to buy anything with credit unless its on a 0% card and only have the mortgage as debt. While we could wait to save another 5 years, I am of the opinion to get it as soon as possible, to enjoy it for as long as possible.
I'm looking at getting approx £25k in savings together but still leaves a £25k-30k shortfall. Jointly, we earn around £63k. What would be the best way to go about it? In an ideal world, I'd save for the lot but thats going to be another 10 years down the line!
£150k remortgage with a new lender?
Secured loan?
Personal loan?
0% Credit cards?
Lots of options, some of which may not fit your "risk averse" status.........
The mortgage provider would be my first port of call, most will offer home improvement loans at the same rate as you mortgage upto a certain LTV (on the current value) provided you score well on the affordability side of things.
This is what we did on our first extension with Principality. Problem is that a lot of lenders have tightened up their lending criteria so you might get some money, you might not.
Subsequent to our first extension we applied for further lending, now with HSBC, for a loft conversion. Smaller sum of money this time but got turned down on affordability mainly because my wife is on a career break to raise our kids. Ended up being helped out by bank of Mum and Dad instead.
Unfortunately they don't seem prepared to lend on the projected value of your house post building work anymore. I guess you could get the money and go to the Caribbean instead or the building work goes tits up for whatever reason and the now have a bigger loan secured on a house worth even less.
This is what we did on our first extension with Principality. Problem is that a lot of lenders have tightened up their lending criteria so you might get some money, you might not.
Subsequent to our first extension we applied for further lending, now with HSBC, for a loft conversion. Smaller sum of money this time but got turned down on affordability mainly because my wife is on a career break to raise our kids. Ended up being helped out by bank of Mum and Dad instead.
Unfortunately they don't seem prepared to lend on the projected value of your house post building work anymore. I guess you could get the money and go to the Caribbean instead or the building work goes tits up for whatever reason and the now have a bigger loan secured on a house worth even less.
garyhun said:
You've got a mortgage of £120 and then you say it's mortgaged for £190 but valued at £185.
Confused!
We owe £120k, Nationwide valued it at £190k but personally I think it would sell at £185k. Whether anyone would buy it is another matter!Confused!
I guess i'll have to speak with Nationwide and see what they can offer. I dont mind taking on that extra responsibility of larger payments as I think we can afford them but i'm just looking for the cheapest way to get the capital needed for it.
Edited by Chicken Chaser on Tuesday 10th January 12:38
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