adding debt from 1st house onto self build mortgage?

rover25

Mortgage on house down to approx 140 grand over approx 32yrs but would still be in negative equity prob to the amount of 40 grand.:eek:
Have site at parents house. passed to us. would need a mortgage of approx 90 grand to build v. simple 3 bed bungalow. If we paid 10% of that as deposit the mortgage would be 80 grand.
Could we arrange for our lender to allow us to sell house at say 100 grand and make this 40 grand outstanding into a loan which we could then add onto our self build mortgage when the build was complete and the new property was revalued. Would it expect it to be valued at 140 -150
(New mortgage amount would be 80 + 40 = 120 grand altogether plus fees etc = 130 grand max )
Wondering if this is a possibility at all or would have been before the credit crunch really took over.

silvercar

You won't be able to redeem the current mortgage without finding the funds to clear the balance; no lender will wait while you build a house to get their money.

I have little knowledge of self build mortgages, so don't know what you can borrow before the build is complete. The land must have a value so there would be the possibility of securing a loan against it, this may give you enough to clear your current mortgage, but would it also give you enough to build a house?

rover25

Thanks for your reply.
I agree with you in that I don't think the lender would wait, but would they allow the outstanding debt to be paid back as a loan (not sure I'm saying that properly) with montly repayments until the self build house was built and then the loan amt consoildated into the mortgage of the self build property.