Additional lending on a mortgage

ns176897

Hi,

My wife and I moved house 6 weeks ago, valued at £400k, we paid £390k with a £45k deposit (i.e. 90% LTV). We are in Scotland and the lender is Accord.

The house is in a desirable area and good condition, however we are considering some work to alter layout and size, adding an extra room downstairs and doing an attic conversion extending from the current two oddly shaped bedrooms upstairs to three proper bedrooms and two bathrooms including a large master with en-suite etc. We have been quoted £80-100k for this, the increase in house value would significantly exceed this.

What are people's experience of taking additional lending from their mortgage provider for this kind of thing? Is it a reasonable thing to do? Is it actually do-able? Clearly we will require further time (minimum 6/12 to be eligible for additional lending in the first place) and firm plans, and an idea of the potential end value.

Thanks.

Pixie5740

No your mortgage lender won't give you another £80k to £100k. You only have £45k equity in the property. What you are proposing will give you a LTV of over 100% which you can't get these days.

Clive_Woody

ns176897 wrote: »

Hi,

My wife and I moved house 6 weeks ago, valued at £400k, we paid £390k with a £45k deposit (i.e. 90% LTV). We are in Scotland and the lender is Accord.

The house is in a desirable area and good condition, however we are considering some work to alter layout and size, adding an extra room downstairs and doing an attic conversion extending from the current two oddly shaped bedrooms upstairs to three proper bedrooms and two bathrooms including a large master with en-suite etc. We have been quoted £80-100k for this, the increase in house value would significantly exceed this.

What are people's experience of taking additional lending from their mortgage provider for this kind of thing? Is it a reasonable thing to do? Is it actually do-able? Clearly we will require further time (minimum 6/12 to be eligible for additional lending in the first place) and firm plans, and an idea of the potential end value.

Thanks.

If you currently have a mortgage of £345,000 affordability is the big question, particularity adding on another £100k. As was already mentioned you will not be able to borrow more than the house is currently worth (even if you think it will be worth more post-modification).

Best bet is to work on overpaying your mortgage and getting that reduced ASAP until you have a big chunk of equity in the property and then think about any modifications, but possibly consider doing these in stages and paying off each one before moving on.

Actually first thing to check would be if all of your proposed ideas would be allowed under permitted development or with a planning application. Have a chat with an architect to get some idea.

ns176897

Hi,
Thanks for your reply. We are in the process of discussing with architects etc to get plans made up and ready to go for the future, we just wanted to see how people raise money for this kind of thing. I think we will try to overpay and increase our equity for a few years alongside the house increasing in value (prices are rising well in our area), which should give us eventually the difference between what we owe and house value needed to borrow the additional money, however long that takes. Thanks.