Demolish/Rebuild on a Mortgaged Property?

sdavies13

I own a bungalow which is mortgaged.

Have been thinking about designing my own green/energy efficient bungalow then having the existing one demolished and the new built in its place.

Question is does anyone have any ideas how a mortgage company would deal with such a situation? As the mortgage is secured against the existing property doubt they would be best pleased if I then demolished it to rebuild.

Also anyone have any advice or insights on demolishing an existing property to build a new one?

Friends and family seem to think I am mad but when I looked at buying land with development opportunity it tended to be dearer than buying an existing property! Where I bought many neighbours seem to have done similar (existing properties were all very old and cheaply built, but nice big plots on a London commuter route) so the precedent has been set.

Thanks.

holly_hobby

As you probably guess, the mge lender will not permit this, as the current mortgaged property is their suriety.

If you were able to secure developement/self build finance, to effectively redeem the current mge, and provide the funds to start and complete the build - that would be the way to go (and no doubt how your neighbours have facilitated their own builds, if not by cash).

Once the build has been completed you could seek to remortgage onto a resi mge (beneficial if bridge finance is used), where there are some niche providers in the "green mge" market such as :-

Ecology B Society - http://www.ecology.co.uk/

Hope this helps

Holly