Home Improvement Loan/Mortgage

warez22

Hi there

Hope someone can help.

Have a house on a mortgage - mortgage £51000, value of house approx £165000.

Thinking of extending - value approx £45000 - value of house will then be approx £210000.

My wage £17000, partner newly self employed so no accounts as of yet.

Rang existing mortgage company, Nationwide who say based on affordability can't lend us anymore.

But we have been overpaying for many years which is a similar amount to what the existing mortgage and extra borrowings would cost.

I said that we have proven that we can afford the amount as we have been paying that amount for many years, but they said that that is irrelevant and that it is based on affordability, not equity in house or proof of previous payments.

I am so upset, is my dreams of an extension up in smoke?

Any help would be greatly appreciated.

Thanks in advance.

bigadaj

Probably not good news, as with the extension cost and only your wage you would need to borrow over five times salary which doesn't happen any more. Also the spend cost is only equal to the rise in value of the property, you should create more value ideally for this to make sense.

Sensible option would probably be to wait until your partner has three years accounts and cold then be included, though this so sometime away.

Thrugelmir

warez22 wrote: »

I said that we have proven that we can afford the amount as we have been paying that amount for many years, but they said that that is irrelevant and that it is based on affordability, not equity in house or proof of previous payments.

Lending money for mortgage purposes is based on affordability. That's in part why interest rates are low as opposed to other types of loan.

You can help yourselves by overpaying your current mortgage by as much as you can and reducing the debt you owe. Realise that this is not an instant solution. However finances are best managed with a long term view or objective in mind.

kidmugsy

warez22 wrote: »

Thinking of extending - value approx £45000 - value of house will then be approx £210000.

Just a word of caution: it might not follow that because you have spent £45k on the house that your future buyer will pay £45k more for it.

warez22

Thanks for the replies.

I think I will knuckle down, pay off as much as I can and look at again in 12 months time.

The reason for the extension was to get a bigger bedroom for dd2 as she is 7 and has got the box room. I am sure she can put up with it for another couple of years.

I am in this house for the long term so the expense of the extension will be cost effective in the long term, I am sure of that.

Just a real bummer because we have proved that we can pay the amount because we do already, never mind, just try and shrink the amount owed as quick as we can and go from there.

Thanks again.

mrchiggles

kidmugsy wrote: »

Just a word of caution: it might not follow that because you have spent £45k on the house that your future buyer will pay £45k more for it.

Yep, worth checking what similar extended properties in the area ate going for to check your sums or you might end up in trouble.

warez22

There are no extended properties in my area, it is a very small village. But when I looked on right move within a 10 mile area similar properties were going for 210 - 230 so I think it would be financially viable.

But it's a no goer looks like at the moment, unless I get finance from a home improvement loan which will be very expensive, so all on ice I think, think with my head instead of my heart.

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