Do any lenders let you borrow more than house value?

matt8787

thanks for the long post Holly

Re all those saying to save up - I know its the wiser, more prudent thing to do, but we don't want to wait. We know the penalty for not wishing to wait is to pay more in the long run, but life is short. We're already on the wrong side of 35 and want to get cracking with things.

Re the property holding/increasing in value, we'll give plenty of thought when extending to the value that each improvement is likely to add (though first and foremost we want to live in it and enjoy it).

Re the unsecured loan, i've not had a mortgage before, so not sure what effect it will have upon our credit rating / loan eligibility - but at present we both have 999 ratings, so hopefully will still be good to apply.

We're buying in SE London, so hopefully prices in the capital will continue to go bonkers :-)

Yorkie1

matt8787 wrote: »

thanks for the long post Holly

Re all those saying to save up - I know its the wiser, more prudent thing to do, but we don't want to wait. We know the penalty for not wishing to wait is to pay more in the long run, but life is short. We're already on the wrong side of 35 and want to get cracking with things.

Re the property holding/increasing in value, we'll give plenty of thought when extending to the value that each improvement is likely to add (though first and foremost we want to live in it and enjoy it).

Re the unsecured loan, i've not had a mortgage before, so not sure what effect it will have upon our credit rating / loan eligibility - but at present we both have 999 ratings, so hopefully will still be good to apply.

We're buying in SE London, so hopefully prices in the capital will continue to go bonkers :-)

These scores are wholly irrelevant to lenders. They have their own internal scoring systems and are much tighter on affordability now.

An unsecured lender will take into account your existing mortgage commitments as well as the higher interest rate you're likely to be charged on the unsecured loan.

holly_hobby

As Yorks states, these scores are completely irrelevant to the scoring system a mortgage lender uses as part of their underwriting process ... but as you say you've never purchased a property before, so I can understand why you wouldn't be aware of that fact.

The loan will come off your affordability, but with a 425k borrowing capacity, you may still come within the 275k you want.

The rest of my earlier post, whether its detail was appreciated/understood or not by you, re the property actually valuing up plus ensuring you will get the planning permissions reqd etc (to make your plan work), stands regardless and does need considering - as this may make your whole idea academic, if it falls at the first hurdle on survey - which is likely.

Holly

mrchiggles

I know I mentioned it earlier in the thread but if the place is a "doer upper" then getting the existing property up to a reasonable standard first and then getting it revalued will allow you to realise a decent chunk of equity (hopefully) in order to reduce your risks against doing the extension.

Worth a thought about doing it in "2 phases" if you can design the kitchen/etc in a way that doesn't involve it all being ripped out when you extend.