Additional Borrowing

sleepingangel_2

He bought our house in 2008 at the peak of the housing market. Since then it has reduced in value by 13.5%. We could not sell now as we would be losing money. We want to extend but have been told by the banks that we cannot as our current mortgage plus what we want as additional borrowing would be more than 80% of the value of the house (it would make it 108% if you take the value it is now). It appears that they do not take in to consideration the value of the house after the work is completed. They did suggest we took out a loan for the additional work then request a re-evaluation of our house prior to remortgaging for the whole value. Has anyone done this who can offer advice? I am concerned that they would still say no and we would be left with a large loan for years to come. If not then we are stuck in a house that is too small that we cannot sell due to negative equity and which we cannot extend on to.

beecher2

It is doubtful that you'd increase the value of the property by more than the amount spent, so even if they did allow you to consider the value after work, it would still almost definitely be above 80%. All you can do is save up/overpay your mortgage - if you go onto Debt Free Wannabee forum you'll get help with your budget.