Advice for Loan on House

Charllie

Hi Folks,

I need some advise to help me sort out a problem that i have before it gets too deep.

My wife and i purchased a second house 12 months ago for renting and with a long term view to make some money years later down the line.

The property was purchased for £62,000 and needs approx £4,000 worth of work to make it rentable. i have had it revalued today and in its current state it is still worth the same value, however if the work is completed it will be valued at £75,000 with a rental potenetial in the area of £450 per month.

If i sell then it would be at a loss as i have spent 12 months mortgage (interest) not to mention the estate agent/solicitor fees. Therefore i really would like to keep the house and rent it as it will eventually become a money maker, also the mortgage payments are low (£244).

My question is:
1) Is there any way that i could raise the required £4,000 to renovate the house using the house as security?

2)Is there a particular bank etc that deals in this type of loan?

With the low mortgage, the rent would cover a loan also. I would really appreciate any suggestions from anyone who could help me regards my situation.

Thanks
Charllie

benfish88

It may be possible for you to get a further advance with your mortgage lender which would be added on to the capital you already owe. This would be dependent on whether they thought you could afford the additional amount.

A number of mortgage arrangements have the option to extend the amount loaned. Maybe you should check with your lender or get some quick advice from the person who brokered your mortgage.

benfish88

Charllie wrote: »

Hi Folks,



2)Is there a particular bank etc that deals in this type of loan?

Thanks
Charllie

If you got the loan from the same lender then this would be known as a further advance, if you were to go to a different lender this would be known as a second mortgage.

It all depends on whether the lender views your second home as being adequate security. If you explained the situation to them regarding the additional equity which would be generated by the improvement then I'm sure they would be more than happy to entertain your additional loan.

Charllie

Hi Ben,

Thanks for the advice. I have been advised by my finance guy who arranged my mortgage that the building society (Chelsea) who i have the mortgage with are not giving out money at the moment, so haven't gone back to them.

Therefore i am not sure what to do now. Can't take a personal loan as i have one of them for my house i am living in.

Thanks for the advice all the same, i appreciate it.

Charllie

jonesMUFCforever

I would ask Chelsea B soc. whether that is true or not it could just be that there is not enough commission in it for him.
You can have more than one personal loan if you can afford the repayments.