building extension ran out of money need to re-mortgage!!!

mikeep

Hi

We are currently putting on a big extension to our house, we re-mortgaged the property to release some equity in order to fund the project but it looks like we will run out of money...

Our existing property is valued at approx £340k our existing mortgage is £300k. We have been told by our existing lender that we cannot release any more equity from the property as it would take our mortgage to over 80% of the properties value.

The dilemma I have is that the property once finished is going to be worth £430k but it isn't finished yet, our lender said that they will not re-value the property until it is in a liveable state???

Anyone offer any advice on a way forward?

Thanks in advance!

nosha123

I really sympathise with you - we are building a house from scratch.. and have the same problem.... so struggling by - living on fresh air and ploughing every penny into materials for the house.

We will max out our credit cards towards the end - then pay them off with our vat reclaim (as its a new build)

Sadly I dont have much advise for you! Concentrate on spending ONLY on what is absolutely necessary! Dont spend on anything that you dont have to at this stage! Then when it is 'habitable' the banks might be more friendly.

mikeep

i've been looking around and it looks like i will have to get a personal loan out to finish, unless i can find a lender who will allow me to re-mortgage for higher than 80% LTV???

Synchrouk

How are you getting on?

Dan_1976

You may be able to get a 2nd charge but it will cost a lot more. I would say get a broker on the case to help. I know you hear a lot of that on here but they will search the market this faster for you and can tell you if your goingin the right direction.

If the property is unhabitable, no bathroom or kitchen you may have to go down the personal loan route.

JA1000

I had the same issue on a new build at the begining of 2009. I was short by about £30-40k. Banks had already lost me money but I could have thrown the towel in and discussed what we could do with the building site.

I got out the credit cards and every last penny I had and ploughed it in to the build so I could get it finished.

I did finish it but now the banks wont let me remortgage to include the credit card amount which in my opinion should have been included anyway. And the reason they won't lend to me - I have too much on credit card!!! the vicious circle.

After I had completed the build and the 0% deals had run out on the credit card the rates and amounts I paid went through the roof. My only mistake was to use all the credit cards before keeping one spare for a balance transfer.

Without the CC I would not have finished but at paying 34% interest I am just looking to clear the amounts as soon as possible, I think is is probably better than being half finished which is more stressful.

You have to have faith in yourself becuase the banks will not want to know. If you can get it finished without the banks then well done, and when it comes to a revaluation on a finished product, do it in the knowledge you did it without their help.

Good luck.

Fairdo_2

BuildLoan deal primarily with Self Build and renovation Mortgages, so they would be my first port of call at the moment.

Last one I did for them still allowed you to borrow up to 95% of value at each stage, but that may have changed as that was last year now.