Borrow to finish build or part then re-mortgage

lynnnie123

Hi
We are in a dilemma. We need £110,00 to finish a renovation project that we have started. we bought the plot and coachouse outright without mortgage and have financed everything ourselfves so far from savings which has cost in the region of £270,000. We need the £110 to finish the project which when finshed the architect, surveyeor and builkder have said will be worth in excess of £560,000 - £600,000.
Our dilemma is that should we borrow the full £110k on a self build rate or borrow just enough to get the coachouse habitable i.e. with bathroom and kitchen, thus leaving some rooms unfinished. we could then move in and in apply for a "normal " mortgage to finsh the project as we would be living in it. The quotes we have had so far have been around 5,95% svr in the self build range. We intend this to be our forever home and are not in a rush to finish it.

Can anyone advise please.

Thanks

Thrugelmir

Personally I would obtain sufficent finance to finish the project.

5.95% doesn't seem an unduly high rate for self build finance. Are there fees attached though?

lynnnie123

Hi Thanks for that.
TBH No great amount in respect of fees. However we are torn between Buildstore at the rate we stated and Dudley BS with a rate of 4.99 SVR for the term of 14 years. However, there do not appear to be any restrictions in moving the mortgage after 2-3 yrs to a more competitive mortgage. We are being a little meagre if the truth be known as we have had a very small mortgage of £300 pm for the past 6 years and although we will have a beautiful home worth a great deal of money, one has to look at the best options for achieving this.
The part of the building that we are proposing to leave until we can go for a normal mortgage will be that which is intended for use by my daughter and her son - i.e. and annexe. She has her own home at present and is selling this in order to move herself and her son with ourselves. She does not constitute part of the financial plan. But as her home is not sold yet and our new home can be ready for Xmas, we feel that we may be best to get our section ready and move in and leave hers unfinished until such time as she sells her present home.

Hope thats not too long winded and am really graetful for your advice.

dimbo61

Have you looked at the YBS offset mortgages with "friends and family" that way your daughter could when she sells her property offset your mortgage!
Just an idea