Extension - mortgage company approval?

mikeduke2

We are currently in the process of planning a large extension on the side of our house. The plans are for a double story extension and attached garage and would add another 50% to the size of the house. We are currently going through the process of getting planning permission and tendering to find a builder. We expect the extension to first fix to cost around 100k.

We bought the house 18 months ago for around 400k with a mortgage of 270k (now approx 224k). I had a couple of question relating to the mortgage, which hopefully someone will be able to answer.

1. Do we need to notify the mortgage company about the extension before it takes place? If so, do mortgage companies usually have any issues with this?

2. Our fixed rate runs out in April 2013, would the extension affect any remortgage of our house (assuming the extension was started but not completed at the time)?

Thanks

holly_hobby

yes, you need to advise the lender of the proposed changes ... as the property is acting as the security for the mortgage, so they have a vested interest.

If you are just looking to switch rates and stay with the same lender, then no it shouldn't affect the application.

If however, you want to change lenders, or are after a rate with your current lender, that is available to LTVs, below your original figure, then unfinished works may well negatively affect the value of the propety on survey (taking it even below your original purchase price).

If you do want to move lender, then you would be best placed to wait until the works are completed and you've had final inspection and sign off by the local authority planning office.

Hope this helps

Holly

mikeduke2

Thanks Holly,

That was inline with my thinking about remortgaging, we will just wait for the build to complete or if it hasn't started by then, think differently.

In your experience does approval for extension generally get approved (if sensible, with planning permission etc) or are rejections common?

holly_hobby

Well what will give you a good idea, is if similar properties in your area have the same or similar extensions done.

If there are none, the type of thing that the PO will look at, is whether your double storey extension will cut neighbours light, affect their privacy, is sympathetic to the existing unit and area, whether it can be constructed safely i.e in the case of building a broom on top of an existing garage. That kind of thing ... you may find that the PO may want some amendments to your original plan, be it materials and/or design ... its a suck it an see exercise I'm afraid ... !!

Hope this helps

Holly