still possible to "release" future equity

chatnoir

Hi all,

My OH and I bought our flat for 155k in November 2007, we bought with a 100% mortgage from mortgage express which are part of Bradford & Bingley. Our Mortgage deal runs out in Novemeber this year.
The property we bought has a VERY little kitchen and tiny bathroom (approx 1m x 2.5m...just enough space for a shower) and when we bought the property we did so with the future thought of having a loft conversion, by borrowing on any future equity. As prices have dropped we have will no equity to do this, and we cannot get a new mortgage deal for the same reason.

If we had plans drawn up for the loft conversion and a valuator valued it at a higher price then the £155k we paid for it would we be able to borrow the excess for the future price? has anyone done this in the present climate?

Any help anyone could offer would be great, I don't want to give up on my dream of a nice kitchen and bathroom...with an actaul bath!
:j

Trollfever

I don't want to give up on my dream of a nice kitchen and bathroom

Save for it.

chatnoir

to save 30k to the loft conversion would tek me about 5yrs...I dont plan on living there that long...and before you say "just move somewhere with a nice kitchen and bathroom" we cant re the 100% mortgage and we would find it difficult to sell re the bathroom and kitchen being so tiny!

Robert_Sterling_3

My guess is that due to your 100% mortgage you may be in negative equity with regard to your house.
> think you may have to "sit out" the current credit crunch before your dream comes true.

incher

But if you're not planning on living there that long, it doesn't make a great deal of sense to spend money (you don't have) on work that isn't really necessary (i.e. you can live there without doing it!).

Well, that's how I see it anyway!

chatnoir

As mentioned above, we could just leave it as is and move in a few years. But when it comes to selling it we will be in negative equity and have it will be hard to sell with the bathroom/kitchen as is . If we get the loft done we could stay there longer and possible get ourselves out of negative equity.

i just would like to know if anyone has been able to secure money though re-mortgage of the future price of there property after works have been carried out?

Hugbubble

chatnoir wrote: »

to save 30k to the loft conversion would tek me about 5yrs...I dont plan on living there that long...and before you say "just move somewhere with a nice kitchen and bathroom" we cant re the 100% mortgage and we would find it difficult to sell re the bathroom and kitchen being so tiny!

You want to get in more negative equity when you are already in negative equity? Why do you think it will be difficult to sell with the small bathroom/ kitchen? After all, you fell for it.

chatnoir wrote: »

If we get the loft done we could stay there longer and possible get ourselves out of negative equity

You don't get out of negative equity by borrowing more money. Simple.

Robert_Sterling_3

If you do not improve it you will sell at a lower price at which a different clientele will be able to afford to buy it.

chatnoir

We bought it because we wanted to extend it.

If we borrow an extra £25-30k to do a loft conversion and that adds £40k to the re-sale price then that would take us out of negative equity.(these are just estimate figures obviously) and all of this is just in the planning stages.

We are 80% def gonna do the loft conversion its just a case of getting the funds Via mortgage or loan......we want to do it as we love the area we live and we actually love the flat..bar the bathroom/kitchen. It was converted from ahouse and our shower is in the airing cupboard, and we have no space in the kitchen for things like Draws! we keep cultery in the living room! If we get the loft down we can stay there for a good few more years and possible have our (future) 1st child there....I'm sure someone will pick all this apart now, I really wish you wouldn't i just need an answer to my original question.
Thanks

incher

chatnoir wrote: »

i just would like to know if anyone has been able to secure money though re-mortgage of the future price of there property after works have been carried out?

Even if someone has, the financial climate is changing on a daily basis, so what's gone before won't necessarily predict what will be possible in the future!

If you are planning to stay where you are for well over 5 years, it makes a bit more sense. But I personally wouldn't!

maninthestreet

chatnoir wrote: »

Hi all,

As prices have dropped we have will no equity to do this, and we cannot get a new mortgage deal for the same reason.

If we had plans drawn up for the loft conversion and a valuator valued it at a higher price then the £155k we paid for it would we be able to borrow the excess for the future price? has anyone done this in the present climate?

Any help anyone could offer would be great, I don't want to give up on my dream of a nice kitchen and bathroom...with an actaul bath!
:j

In a word, NO.