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How to finance house refurb - advice needed please
booboobunny
Posts: 22 Forumite
This is quite a long story, that I will try to keep short...
We own a house, where we have lived for 13 years. now we have children it is too small and we need more space. My mother owns a house 60 miles away in my hometown that is currently empty. it is in need of lots of interior refurb and an extension but would be great for us. good schools etc. My mum would be living next door and is recently widowed and lonely, so it works for everyone (siblings included) that we do this. ownership of the property would transfer to me.
We have lots of equity in our current property and had assumed we could remortgage and use this to fund the refurb. Except that the lenders our FA has found say we would have to be out of the property when the mortgage completes, as we are hoping to keep our current property and rent it out. We are looking at buy-to-let for a couple of reasons mainly as husband and I harbour dreams of moving back in here for our retirement. it has lots of sentimental value. we don't want to sell it. but we can't be out of it at the time of completing the mortgage. mum's house is currently a building site - she is overseas - and won't be habitable for a good 6 -8 weeks, so moving in with her isn't an option. are there other options available?
FA advises that raising a mortgage on the new property (which I don't yet own anyway) would only be possible once any structural work (there is some) is done, but we don't have the funds to do this without the mortgage monies. Also, from a financial prudence pov raising a mortgage on the new property rather than the current one would mean more payable tax on the rental income, which isn't a huge source on income anyway.
Can anyone advise on what our options are please? I am completely stumped as had not expected to have to leave the property by completion of the mortgage.
We own a house, where we have lived for 13 years. now we have children it is too small and we need more space. My mother owns a house 60 miles away in my hometown that is currently empty. it is in need of lots of interior refurb and an extension but would be great for us. good schools etc. My mum would be living next door and is recently widowed and lonely, so it works for everyone (siblings included) that we do this. ownership of the property would transfer to me.
We have lots of equity in our current property and had assumed we could remortgage and use this to fund the refurb. Except that the lenders our FA has found say we would have to be out of the property when the mortgage completes, as we are hoping to keep our current property and rent it out. We are looking at buy-to-let for a couple of reasons mainly as husband and I harbour dreams of moving back in here for our retirement. it has lots of sentimental value. we don't want to sell it. but we can't be out of it at the time of completing the mortgage. mum's house is currently a building site - she is overseas - and won't be habitable for a good 6 -8 weeks, so moving in with her isn't an option. are there other options available?
FA advises that raising a mortgage on the new property (which I don't yet own anyway) would only be possible once any structural work (there is some) is done, but we don't have the funds to do this without the mortgage monies. Also, from a financial prudence pov raising a mortgage on the new property rather than the current one would mean more payable tax on the rental income, which isn't a huge source on income anyway.
Can anyone advise on what our options are please? I am completely stumped as had not expected to have to leave the property by completion of the mortgage.
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Comments
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Hi there,
There will be solutions for what you require (subject to the detail of course)
If your broker does not know options for you, then have a chat with another broker.
Best of luckI am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
How much is the building works likely to cost?
Chap where I work carried out a 40K extension and loft conversion all on zero/low percentage credit cards, once the works were complete and re-valued he paid off all the cards with the newly found equity."Dream World" by The B Sharps....describes a lot of the posts in the Loans and Mortgage sections !!!0 -
what about a short term let for 3 months?0
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