How to borrow large loan for home extension without equity

yatesco

Hiya all,

We are in the situation where we need to extend the house, and need around £50,000K to do it, the problem is that there isn't enough equity in the house (£13K).

Once the work is done, we expect the equity in the house to rise by about 30K, but that still doesn't cover the cost of the loan.

We both have good credit, and large salaries, but personal loans seem to be limited to 15, or 25K.

Help Our baby is on it's way and it has nowhere to sleep

mountainofdebt

To be honest I don't think you are going to be successfully with your quest - after all if if I was lending someone £50K I would want that sort of mney secured and from what you say, you can't provide that sort of security.

I think you have only 2 options - to either manage with the present space or to move.

A difficult choice I know but in reality you are not going to get the extension approved, built and decorated by the time the baby arrives.

jonesMUFCforever

I would be very tempted to ignore the advice of the last poster.
Going over 100% LTV is asking for trouble.
Why spend £50k if it will only increase the value by £30k???

yatesco

Hi ejones,

that is a very good question Basically, we have a house that we are very happy with, in an area that we like, with a garden that is just the right size for a family (150ft) in an excellent catchment area.

But, we need more room. We could move, and spend a *lot* more to get the equivalent (around £80K more), or we could stay where we are (with the shiny new bathroom, shiny new kitchen etc.) and spend around £50K to extend.

The value of the house is always subjective....just look at how it has changed in the past decade (!!!) so it absolutely does make sense to us to keep this house and pay £50K more, rather than pay a lot more, for what we would consider less.

jonesMUFCforever

Your argument is fine until a lender comes to value your home and says sorry no you can't have £xx as a loan because if you default there is insufficent equity to repay us.
If you go to a sub prime lender then expect to really pay over the odds and be badgered into taking out a MIG which will cost you thousands but will cover YOU for nothing.

I also note that you are both on good salaries but is your wife going to work until childbirth and straight afterwards or is she going to be taking maternity leave which will leave a big hole in your finances.