Raising money for new build

moj1966

Looking for advice on how to raise money to build new property.
the situation is as follows:
I part Own a house im living in with my children and soon to be ex husband. we are no longer together. We have a 61.000 morgage on a property worth 180.000 approx I have applied to build a new property in our garden and have been told by planning dept that it should be finalised on monday.
This is going to be attached to existing 4 bed bungalow and the new build will be a 3 bed bungalow.
the final stage of the plan would be for me and children to move into the new property and to sell original property so my ex can get his share of the market value at the end of the build.
As once the children finish education he plans to move away.
So how do I go about raising money to build this new property as I have about 6000. worth of debt but I have never missed a loan payment or morgage payment, but have been very bad with my credit card.
Thanks
moj

robertbruce

Hi
Looks like it depends on 2 main points.

1- is hubby due £59.5k from the proceeds, being half of the equity or has it been calculated differently, eg. half of the equity LATER when the price has gone up..

2- how much do you think you need to raise for the new build

These answers will determine your possible tactics to help secure your dream.

If you can remortgage NOW you can buy out your husband's share, repay the current mortgage and release some cash to start the work. As the new property develops, you may be able to borrow against ITS value as a separate property to complete the project.

Only problem I can see is that this is against your husband's interests financially, but secures you and your children for the long term. He will only have the £60k to go and start again, but if that is where you are at emotionally, then it could let him go sooner rather than waiting.

Can't help thinking its a shame the family can't all enjoy it together, but that's another forum and another story I'm sure.

moj1966

We have decided to split the money after building. there is such a thing as amicable divorce but we no longer love each other, but we both need to be able to get the most money out of a bad situation to make a secure as possible future. So we are both able to buy a house so we can share the care of the children who are both teenagers
I decided I want to stay in the new house
1 I only need to move next door
2 I love the area im in
3 the original house would have emotional baggage to hold me back
4 he wishes to move back to london when the children go to uni or college
5 Plus I only get a small income
6 I have no plans on moving away

robertbruce

Hi
If you can work together to this end and have not already entered into a legal separation (ie. one documented by a lawyer) then it might be possible to get a joint loan for 80% of value giving £144k minus the £61k leaving £83k of funds released to do the job you need.
When you are finished building, you can remortgage the new building in your own name (make sure it has a different postal address allocated by the Post Office as soon as possible to save trouble later)

Since the new house will have a value of around £130ish (you'll know better what they cost in your area) and you will be selling the older house for about £180k, hubby is probably due about £65k for his half of the new one PLUS about £18k for half remaining equity on older one totalling £83K (coincidence it is similar to earlier figure but not related).

You will have received about £18k from the sale and hubby will have £18k. You then need to remortgage the new property for about £47k + your £18k and give all £65k to hubby for total closure on the properties.

Summary: (I think) Hubby has £83k to get a new start and you have a house worth £130k with a £47k mortgage (£83k equity which is all yours) letting everyone come out with a decent solution financially at least.

Hope this helps as I am still uncertain about how much you need to do the job. Apart from that, the figures add up.

Cheers.

moj1966

Thanks I dont know how much we need to build, It might sound stupid but not got a clue how to go about costing the whole project.
Its taken ayear to get here and my head has been in the clouds.
One of my friends built a few years ago so going to pick her brains on finding good realiable builders.
Going to make appointment with morgage adviser and the halifax our current lender to see what they can offer.
never even had anything built the biggest project Ive ever done is getting a kichen installed.

robertbruce

Hi
Loud warning bells ringing now. If you have never done this and don't even have a price for the build, it WILL go over budget (just look at Wembley Stadium... and they knew what they were doing, supposedly)

PLAN B- Sell the property you have for £180k, settle the mortgage of £61k and split the balance to give you each £59.5k as a deposit on another property.

OR get back to basics and start a proper plan for the original idea... gather quotes, listen to advice, speak to planners, builders and tradesmen for a minimum of 2-3months and re-think the whole process based on the knowledge you will have gained. This is a SERIOUS move and you can't just wander into it with a dream or everyone, including the children, will get badly hurt in the process.

Please take a step back and look at the work involved, and if you still want ot do it, go in armed with some knowledge. You certainly need a lot more than you have at the moment.
Good luck whichever way you choose.