Additional borrowing for extension

RavingMad

Hi

I'm contemplating a 2 storey house extension and a nearby builder has quoted us £30K.

The problem is that with current house prices, we don't have that much as equity (base on houses up for sale on our street) We have around £20K in equity.

Using the HSBC mortgage calculator (who we have our lifetime tracker mortgage with) the monthly payments would be around £250 a month (2.99% tracker), which we could easily afford.

Will the HSBC turn us down or are they likely to offer us a deal but at a higher rate? I plan to ring their CS but am I best to pop into my local branch?

Thanks

powerwin

How much is your house worth?

How much value do you think your extension will add?

What do you know about HSBC's general attitude to financing extensions?

Rgds

Dave_the_Ginger_Cat

I hope that your answer from HSBC won't differ much based on who you ask - what you might find if you telephone is getting hold of a mortgage specialist quicker rather than having to make an appointment. I'd say do whatever is most convenient for you.

You don't mention your house value, but most lenders won't do a secured loan on anything above. A quick Google search shows them in the range 75% - 90% of the house price.

What this is likely to mean is that you'd need to apply for an unsecured loan, which can go up to this amount with some lenders. The rate won't be as good as a secured loan rate and you should shop around for rates and suitability. May be worth re-posting on the loans board for advice.

Thrugelmir

RavingMad wrote: »

The problem is that with current house prices, we don't have that much as equity (base on houses up for sale on our street) We have around £20K in equity.

Then a secured loan is out of the question.

If you can afford the increased mortgage repayments. Then channel this money into increasing the equity in the property.

RavingMad

Thanks for the replies. Mortgage is just under £80K and house is probably worth £100K. Is unsecured loan the only way?

Thrugelmir

RavingMad wrote: »

Thanks for the replies. Mortgage is just under £80K and house is probably worth £100K. Is unsecured loan the only way?

There's insufficient equity in the property to secure the debt as it stands.