Side Extension Finance Needed

bery_451

My parents would like a side extension on their home and got the plans and permission ready.

The problem is that they are retired and getting state benefits.

my parents house is freehold as the mortgage been paid off and is worth about £145k.

How will my parents finance for their side extension which will cost bout £40-£50k?

cheers,

Rafter

The FSA website includes guidance on how to release equity from your home which seems like what you seem to be asking?

Are you parents sure they need/ can afford an extension if all they are getting is state pension?

If they have reasonable private pension they may well be able to get a lifetime mortgage.

Good luck.

R.

bery_451

Rafter wrote:

The FSA website includes guidance on how to release equity from your home which seems like what you seem to be asking?

Are you parents sure they need/ can afford an extension if all they are getting is state pension?

If they have reasonable private pension they may well be able to get a lifetime mortgage.

Good luck.

R.

hi,

my parents do not want equity release as they want to pass on their home to family left behind.

me and my relatives will help with the monthly payments for side extension.

any advise?

h4nym

bery_451 wrote:

me and my relatives will help with the monthly payments for side extension.

In that case, then how about these two options:

1. Your parents take the loan out, secured on their house and you & relatives stand as guarantors

2. The practical limit now for unsecured loans is £25,000. Can you and others not borrow that each independently and raise the money that way?

H

bery_451

h4nym wrote:

In that case, then how about these two options:

1. Your parents take the loan out, secured on their house and you & relatives stand as guarantors

2. The practical limit now for unsecured loans is £25,000. Can you and others not borrow that each independently and raise the money that way?

H

me and my relatives checked out credit report and it was average. I doubt we can get a £25000 unsecured loan with our average rating.

looks like the loan has to be secured on the house. what is the cheapest secured loan?

h4nym

There are remarkably few cheap secured loans - they only tend to be used by people who really need them! A mortgage, however, is a different question - and what constitutes value depends on your circumstances / tie-in period etc etc etc. They'd probably be able to get a mortgage if you stand as guarantors.

H

brasso

Honestly, I don't want to sound like the grumpy old man that I undoubtedly am, but if your folks are on state benefits, is it really wise to be borrowing £50K for a home extension?

bery_451

isnt a mortgage for purchasing of a home only?

jonesMUFCforever

bery_451 wrote:

isnt a mortgage for purchasing of a home only?

No.
A mortgage is purely a means of having a charge on your property in the event that you do not repay what you borrowed.

bery_451

so how would it be possible to finance it? if banks give out maximun £25000 loan?

bery_451

Whats cheaper, a secured loan or a mortgage for the side extension?

is there any other cheaper finance products than the above 2 mentioned?