Buying a house with the intention to add on an extension

more_money_for_me

Just to say the plans we have approved are for creating a 4 bed house, and our local planners have only asked for 2 parking spaces. This was full planning not permitted development. I don't know if it has any bearing on your plans, but if it is a planning officer expressing an opinion, as opposed to planning law then it is possible to negotiate.

onlyroz

Regarding the parking spaces, we were told that we would have to add one space to what was there already. The submitted plan has to include a parking layout indicating the new space.

NannyV

So if we sell for 240k and our current mortgage is 170k, we get the 70k equity back when we sell .... so then we would ideally be borrowing at 240k ish and hopefully get a mortgage for about 200k and owe the additional 40k, which leaves us with 30k towards an extension, and save up the remaining. Id the best way to do this? Or is it better to keep the 170k mortgage and apply for some sort of loan and use credit cards?
And also, if our mortgage deal is half way through, we have to check if we can transfer this product and possibly borrow more on top or we would get a charge wouldn't we?

Sorry, not up to scratch with all this!

NannyV

NannyV wrote: »

So if we sell for 240k and our current mortgage is 170k, we get the 70k equity back when we sell .... so then we would ideally be borrowing at 240k ish and hopefully get a mortgage for about 200k and owe the additional 40k, which leaves us with 40k towards an extension, and save up the remaining. Id the best way to do this? Or is it better to keep the 170k mortgage and apply for some sort of loan and use credit cards?
And also, if our mortgage deal is half way through, we have to check if we can transfer this product and possibly borrow more on top or we would get a charge wouldn't we?

Sorry, not up to scratch with all this!

anyone know about loans for extensions?

Our house was valued today at £250k so if we move it would be to a house of about £240k, current mortgage is 170k and I think we could borrow 200k in a new mortgage and have 30k left towards an extension if it works that way? And need maybe 20 to 30k extra on some other loan?

sunshinetours

Don;t forget your selling and buying costs. Agents fees at roughly 1.8% including VAT, stamp duty on new place at 1% and then legals for sale and purchase. Plus initial cash for starting planning - you will need to put aside £10k of that equity you are retaining just for that

Assuming you sell for your valuation of course....

It will be tricky to do what you want to do because of your relative lack of equity compared to prices you are looking at

Do you have any other debt, this may impact on your borrowing ability for mortgage and the otehr laon you will require

Have you considered where you will live whilst major extension is going on

NannyV

We currently have almost £20k in savings so that would cover the fee's etc. and we would have to stay in the same property while an extension is put on, so the extensions would have to leave in place the current rooms if it fell on the side of a kitchen or bathroom for example..... if it was a bedroom we would all camp in but yes thats an important factor too, Thanks.
We don't have any debt. My OH has been doing over-time resulting in about £1000 extra a month but can't guarantee that will stay forever so can't rely on this for paying towards the extension

sunshinetours

Then personally I would try and build up as much equity in savings or in the house as possible using this extra overtime while it lasts. It will put you in a much stronger position when you do move. What you want to do certainly can be done, its the financing of it that can be tricky unless you have the whole building budget in cash

Also consider bunglows if popular in your area. Often on large plots and if you can get permission to extend into whole roof either by dormers or whole new floor to turn it into a "house"

NannyV

I was wondering that about bungalows as there are a few in that school catchment area (whole point of moving - well, that and more children = more rooms needed!)
At the moment we save all of the over-time money anyway and my partner gets about £2k bonus a year if the business is good. Thinking along the lines of only moving if we see something that has perfect potential and only if we can finance the extension straight away through a loan or savings as we don't want to squeeze into something really small and dated and wait to do it up. Luckily we do have another 5 years before my son starts secondary school so we have time to really wait and save but if we see the perfect place we 'should' be able to do this plan