Financing home extension

[Remster500]

I'm hoping that the PH Mortgage guru's can give me a few pointers on the following.

Our house is currently valued at £275k and we have £100k mortgage. We have been looking at moving to a property in the £450-£500k bracket but having viewed several quickly realised that we couldn't get all that we wanted at this price. We then looked at current place for possible big build extension and remodel to give 95% what we want at fraction of cost. (we should have applied for Beeney's new TV prog!) We are very happy where we live and have good schools, neighbours, friends & family etc. so no need to move other than more space and a change.

We employed a very good architect who has redesigned our house to give us max living space and we successfully obtained PP last year. Several builders have quoted and we are now confident in getting it all fitted with new kitched, bathrooms etc. for £150k. The property, when complete, will be valued at £350-£375k.

I have been to our current lender, Santander, who will happily lend the money but it will need to be on a separate product to our current fixed rate (3.15% until 2017). Also, the rate they are offering is nearly 5% and they say I can't merge it with current mortgage in 2017 to get a better rate! There is an early payment fee for the current fixed rate product but i wondered whether it would be better paying that and getting a new product larger mortgage to cover everything? Is this even possible? We also have £40k savings which could be used but would rather do it all as a mortgage.

Any advice would be appreciated.

Edited by Remster500 on Tuesday 10th March 15:13

[illmonkey]

£150k spend to add £75k in value? Sure you want to do that?

[Remster500]

illmonkey said:

£150k spend to add £75k in value? Sure you want to do that?

That is what's been keeping me awake! Our house is a semi-detatched and although the road we live on has detached properties up to £650k, the agent reckoned our ceiling price was £375k. However, the size of the house we would create with extension is larger and more characterful than properties at £450k+ elsewhere. Our current plot is also larger than a lot of the houses we've viewed. Classic case of doing it for the family to LIVE in and enjoy or looking at selling down the line.

Edited by Remster500 on Tuesday 10th March 15:21

[illmonkey]

Remster500 said:

illmonkey said:

£150k spend to add £75k in value? Sure you want to do that?

That is the point that has been keeping me awake! The main point is our current house is a semi and although the small country road we live on has detached properties up to £650k, the agent reckoned our ceiling price was £365k. However, the size of house we would create with extension is larger and more characterful than properties at £450k elsewhere. Our current plot is also larger than a lot of the houses we've viewed.

May I suggest getting some other opinions.

[Grumfutock]

I am in the same boat but without the mortgage. We have a 240k bungalow and want to carry out a loft conversion, gable end front and read and alter pitch of roof to max head room. We also want to carry out a full modernization down stairs with some alteration to layout and enlarge the garage.

Estimates are at around the 100k mark and we have that in savings but I don't want to spend all of it on this so I am going for a 40k mortgage to fund it. That said the bank is doing its level best to talk us into 2 personal loans of 20k a piece.

By my estimate the place will be worth around the 400k-450k mark when done, which is nice.

[BoRED S2upid]

Spending £150k to only add £75k really isn't wise. I know it's about more than the money and your going to live there forever etc... But it really is a costly way of doing it.

What does £150k get you? Architects love to spend money. You could probably achieve something similar for half the cost, maybe you should go on Beanys show.

We were in a similar situation it would cost us a fortune to move to somewhere bigger so we extended to add another 25 SQm onto the ground floor and would probably struggle to get that money back if we sold but we weren't spending £150k.

[Remster500]

BoRED S2upid said:

Spending £150k to only add £75k really isn't wise. I know it's about more than the money and your going to live there forever etc... But it really is a costly way of doing it.

What does £150k get you? Architects love to spend money. You could probably achieve something similar for half the cost, maybe you should go on Beanys show.

We were in a similar situation it would cost us a fortune to move to somewhere bigger so we extended to add another 25 SQm onto the ground floor and would probably struggle to get that money back if we sold but we weren't spending £150k.

I totally agree with you about Architects spending money. We were having a sunken corkscrew wine rack at one point that rose from the kitchen floor! I had to have a word and re-focus the guy. However, to add character and features costs money and we don't just want a bolt on square box extension. The properties we have viewed have all had exposed brick internal walls, oak framed extension, bifolds etc. and we want to replicate some of that. If we were to spend the £150k we would achieve a greater sq/M of featured living space than we could purchase for 1/2 - 3/4 the cost of moving. Also, if we moved we would likely still be faced with decorating and building costs to get as we liked. This is why it's such a head fk of a problem. If we can't get the financing side at favourable terms then this may sway it back to moving house as we could port and increase the mortgage if we moved apparently making it a cheaper rate,