Remortgage to pay for an extension

Mikeb4633

Hello,

I currently have a mortgage with A&L. The house is worth around £128k, outstanding mortgage of £118k we would like to build an extension and 3rd bedroom. This would take the value to about £160k. We need to borrow around 20k to do this. Ideally I'd like to remortgage for the extra 20 we need.

Would A&L (or anyone else) remortgage on the basis of the new value to make this possible? Or would it be a case of using other finance and look to remortgage when work is completed?

Thank you in advance for your words of wisdom!

Wh05apk

You would not have enough equity in the property currently to release further funds, once the work is completed assuming the valuation is sufficient, you should be able to raise the funds at that stage, it does however mean you will need to fund the work initially yourself.

MarkBargain

Why do you think spending £20K will improve the house value by £32K? Are you sure? Won't the extension devalue the garden, for example?

If I already owed 92% of the value of my house, I don't think I'd be looking at borrowing any more money in any form!

John424

Indeed, call me cynical but the bull market days of adding value by spending peanuts haven't arrived again yet.

Thrugelmir

John424 wrote: »

Indeed, call me cynical but the bull market days of adding value by spending peanuts haven't arrived again yet.

If you analysis the credit boom years. Property refurbishment was a myth. As the same profit could be made by spending nothing on a property. Property across the board rose irrespective of condition.

John424

Thrugelmir wrote: »

If you analysis the credit boom years. Property refurbishment was a myth. As the same profit could be made by spending nothing on a property. Property across the board rose irrespective of condition.

- Probably right, didn't stop everybody thinking they were the latest hot shot property developer!! God, I hate property booms and dinner table chats about prices as well. I just hope prices stay static for the next 20 years so nobody experiences external negative equity issues and houses become cheaper in real terms for younger generations. But of course, that ain't gonna happen!