Finance for new build

dmorgan81

Hi,

I have bought a house (£285k) and got planning permission to demolish it and re-build, with the plans for the new house being valued by local estate agents at £550-600k.

The big problem is financing the build. I have £120k ready to go (have already increased my mortgage facility to the max for the house in its current state), the total build looks to be costing realistically £190k.

I'm stuck whether to either get started and spend the £120k getting a watertight shell built, and then reapproach the bank to beg for more, or to try and arrange some other finance now so I can get more of it done more quickly.

Overall it'll be worth it, but just not sure what way to go about it.

Any help or advice would be hugely appreciated :-)

scottishblondie

First question - have you asked the mortgage company for permission to demolish the existing house?

dmorgan81

Um, they have seen the plans so kind of - the original plan was to demolish half then re-do the rest. Basically the foundations are awful so it's working out better to demolish the whole lot and re-build.

densol_2

Oh dear ! Don't get into a position of repossession before you rebuild ! The lender would have a bit of a minor shock :eek:

RAS

have you spoken to the Ecology Building Society?

And have you viewed the House Built for £100K programmes?

And deffo talk to the mortgage provider NOW.

dmorgan81

Thanks all. Sounds like I need to give them a call tomorrow then! They were fine with me knocking half of it down so hopefully should be ok with the whole lot (it definitely needs doing,it's a wreck).

Will have a talk to the ecology people too - Sounds interesting!

ACG

This post reminds me of when I worked for a lender.

A bloke had a mortgage with "us" and said he wanted some additional borrowing for home improvements. We declined. He then said thats a problem as the house was demolished and is now a shell, so not worth anywhere near what was secured against it.

We ended up lending him the extra money in order to finish it.

Im not sure that would happen now a days though.