build new house in garden

Need_lots_of_advice

Really hope that somebody on here could give me some advice on steer me towards where I can find some answers.

I'present to give a back ground on where im upto. In 2006 I bought my current home on a joint mortgage with my partner. The house was 240000 and we have a mortgage with mortgage express. Its a repayment mortgage that has a balance of 180000 . At present we are making monthly payments of just over 1100 per month.

Now the complicated bit. In 2008 I was declared bankrupt but my partner wasn't. At the time of the bankruptcy there was no equity in the house as housr prices were falling.

Also during the bankruptcy we fell into arrears and had mortgage changed to interest only for a couple of years.

The mortgage has been paid on time for the last couple of years.

Now the intresting bit. While doing the garden I had a eureka moment. I thought why don't we build another house on the garden by demolition of our garage.

I have been to see planners and seen an architect and they all cant see a valid reason to object .

The new house would be 76 sqm and build cost would be 76000.

Our old house is worth about 280000 at the moment so we have around 100000 in equity. We love the area we live in and would love to build the new house while still living in old house.

We are really worried about talking to mortgage express incase they do a credit search on me and want to stop our present mortgage.

Our plan is to sell the old house after building new one and become mortgage free.

hopefully someone could give us some advice on how to go about things.


Thanks for taking time to read this

Halle71

My parents did this. I don't know the exact financial details but, in a nutshell, they worked out a deal with a developer friend/neighbour. They provided the land, he managed the build and paid for the materials and they split the profits amicably.

Obviously it was a bit more complicted than this but it meant there was no need for outside financing.

edinburgher

You probably need specific legal and professional advice, it goes beyond what this forum can offer.

Where are you getting the £76k from?

SailorSam

I should think the first thing you need to do is go into your local Council and ask about planning permission. Without that your plans are dead in their tracks.

Need_lots_of_advice

Thanks for the quick reply. I thought about selling the land to my brother but it would mean involving mortgage company to agree to new lend to value ratio . thats why we don't want them to know. or as my bankruptcy is six years old now will they not even be able to see it ?

Need_lots_of_advice

SailorSam wrote: »

I should think the first thing you need to do is go into your local Council and ask about planning permission. Without that your plans are dead in their tracks.

I have already been to see them . They were very positive

Need_lots_of_advice

edinburgher wrote: »

You probably need specific legal and professional advice, it goes beyond what this forum can offer.

Where are you getting the £76k from?

the figure is based on a 1000/ sqm build cost. architect said locally thats a good quality house .

antrobus

You will need planning permission (But then you know that.) You will need the consent of your lenders, so you're going to have to talk to Mortgage Express at some point. I can't see any reason why they would want to stop your present mortgage, even if they could. It's not like your bankruptcy was a big secret. It'll be there in the Gazette for the world to see.

LittleMissGiggles123

Where are you going to get the money for the build costs?


Sorry if you've answered that already.

Need_lots_of_advice

LittleMissGiggles123 wrote: »

Where are you going to get the money for the build costs?


Sorry if you've answered that already.

this is what were trying to figure out. if I sold land to my brother he could maybe get a mortgage to buy it for what it will cost to build. then pay off both mortgages when we sell old house

midnight_child

Im guessing you plan to remortgage to raise the £76K to build the new house? Ok, lets set aside the bankruptcy issue for one moment and just run with it as an idea.

The loss of the garden would presumably devalue your existing property a fair amount, eating into the amount of equity that you have. By your figures you have 100K equity, but that is the value of your house now with (im guessing) a quite substantial garden, which will be lost to make way for the new house. If the new house is going to be very close that may detract further as you have lost a certain amount of privacy. Will you need to grant access across the land etc, etc, etc.

The 76K figure you have been given..... how much of an estimate was this? You dont want costs to spiral and get stuck further down the line with half a house that cant afford to put a roof on!!

I would definately speak to an expert about this, as getting the planning permission can be a real hassle (and the people I know who needed it just got a small extension). A lot will depend where you live, for example is it a conservation area? Just as the council seem "positive" does not mean you have been granted permission.

MC