advice on remortgage......pls??

mambury

Hi, I;m not sure is this is the reight board so mods, please move if needed! ta!

Okay here we go.....

I need a bit of advice really re remortgaging and upping the amount.
My DH and I have two kids both sharing a bedroom at the moment (1 x DD age 2, 1 x DS age 5) and we are desparetly running out of space and need to extend as we don;t want to move. Application lodged, expenses for planning app covered. My question is this based on the figures below, what would you do? Would you go with the remortgage to cut costs or the hiugher amount and extend?

Current value (as per mortgage surveyor 21/12/08) approx £180/190K
3 bed semi (one being used as home office for DH)
Outstanding mortgage £73k (18y term)
New mortgage (with additional loan) £113k fixed 2y @ 4.19% again 18y term
We are not due to complete on this mortgage until 04/09 so possibility of a cheaper rate. Or taking the lower amount £73k if the planning fails or we decide to delay the build

I guess I am just a bit worried about adding to the loan in a recession (???!) and the possibility of being bitten by interest rate hikes at the end of term and even in the worst case scenario of neg equity when we would want to remortgage again.

I think my pt job (ASDA) is as safe as any other and my DH job is too but who knows.

We really need the space, otherwise I would be happy to sit and wait.

I really would appreciate any opinions/comments.

Airwolf1

Probably better off in http://forums.moneysavingexpert.com/forumdisplay.html?s=&daysprune=&f=15

Fire_Fox

You really need to investigate what people who have/ are/ will be buying in your street want. An extension will only add or keep it's value if it adds something more to the house than just square foot. Will they layout make sense? Will the extension eat too much into garden/ garage space? Will there be the right number of bathrooms for bedrooms? Will you end up with a massive family house in a street full of old people?

Think about nipping into the local library or onto Amazon to get hold of a property developing book. You may find you can match your needs to the needs of your potential purchasers, you may have to choose between present comfort and future equity.

mummytofour

Could you get a nice office/studio/shed in the garden and move your DH out there, that would free up your 3rd bedroom.

feisty1

mambury wrote: »

I need a bit of advice really re remortgaging
Have you considered speaking to mortgage advisor?

They can aslo advise you on how to protect yr income]

mambury

thanks for your replies. In answer to your suggestions/questions............

Firefox - I live in a very rural area with only maybe a dozen houses in a mile radius with a very small school about a mile away so only a certain type of person would live here anyway. We have approx 1/4 acre in land and a drive with parking for 4/5cars. The extension will still leave us parking for 2/3 cars with a car port. I've taken a lot of time looking at the layout with an architect so I hope I've got that right! I'm not overly bothered about how much the extension will add to the property as we plan to be here for quite some time.

Mummytofour - I would love to banish home but the computer says no! It's not just the bedroom we need. Our kitchen won;t take a table and the lounge isn't that big either. We have a folding table that we have been using three times a day for about 7 years and I'm getting fed up with it! I want a proper table to eat at!

Feisty1 - I've spoken to several advisors and i am in the process of an application through london and country. If we go ahead with this then we will be insured to the hilt ( just in case!). I was more interested in what other people might do in my position.

Mambury

baileysbattlebus

mambury wrote: »

thanks for your replies. In answer to your suggestions/questions............

Firefox - I live in a very rural area with only maybe a dozen houses in a mile radius with a very small school about a mile away so only a certain type of person would live here anyway. We have approx 1/4 acre in land and a drive with parking for 4/5cars. The extension will still leave us parking for 2/3 cars with a car port. I've taken a lot of time looking at the layout with an architect so I hope I've got that right! I'm not overly bothered about how much the extension will add to the property as we plan to be here for quite some time.

Mummytofour - I would love to banish home but the computer says no! It's not just the bedroom we need. Our kitchen won;t take a table and the lounge isn't that big either. We have a folding table that we have been using three times a day for about 7 years and I'm getting fed up with it! I want a proper table to eat at!

Feisty1 - I've spoken to several advisors and i am in the process of an application through london and country. If we go ahead with this then we will be insured to the hilt ( just in case!). I was more interested in what other people might do in my position.

Mambury

If you plan on staying in the house for quite a long time and you really need the extra space I would extend the house into a place you can live in for years to come. It's probably an easier and cheaper option than moving up to a house the size you want. If you add an extra bedroom it will add value to your house - as will a good downstairs extension.

tyllwyd

We did a similar thing in 2008 - 3 bed 1930s house, extended to give a large kitchen/dining room downstairs with two bedrooms above. We are happy we did it in terms of extra space etc, although if we'd had a crystal ball to see what was coming I'm not sure we would have taken the risk.

One thing I'd say is that £40K doesn't seem like a huge budget for a 2-storey extension. Are you confident you can do it for that amount, and if it all went wrong in an emergency would you be able to find/borrow another, say £10K to get it finished?

Also, if you are having work done in the kitchen, remember to allow a bit for the cost of eating out - and possibly moving out completely for a few weeks, or at least putting some stuff in storage for a while. Trying to live through it all can be a total nightmare. Because our extension was a bit more complicated than just building a box onto the back of the house, we ended up with no toilets at all in the house for about three weeks, and by the end of it brick dust had ruined every carpet in the house. Hopefully it won't be so bad for you, but plan for the worst!

mambury

tyllwyd - thanks for your reply! Not bothered about carpets being ruined. I think some of them are older than the house and that was built before 1830! We are planning to timber frame the main extension so that can be up and worked on whilst we still live in the main house, the bathroom's not moving only the kitchen which will go in the ext. So we can continue to live in the house whilst its being done. THe interesting part will be when the stairs are moved into where the kitchen is now!!
As far as it costing £40k, that shouldn't be a problem, as I say timber frame to speed things up and cut the labour cost. My neighbour is a builder and doesn;t have any work this summer (along with a lot of other trades) and my husband was in the trade too until feb 08 (lucky escape that one!) so is very capable and knows a lot of people that need work and will be willing to do it a bit cheaper. We are planning on using the kitchen we have now, it was only put in 4 years ago, might need a few bits but nothing major. Because of all the contacts we have all the materials will be trade price, so only some cheaper labour to pay (most will probably work for cash, there is that little work around here). Oh, and glass will be cheap too because of DH's job!
As long as we get the main build done and livable I;m not that bothered about having perfect carpets etc. That we can do bit by bit. I am putting my foot down about finishing eg the skirting board WILL be fitted :rotfl:

BlondeHeadOn

I think it sounds like you have gone into this very thoughtfully, and it sounds like a sensible option to me. It will also generate some work for your local builders etc., which can't be bad for your community.

I'd say so long as the mortgage is do-able, then go for it.