Mortgage advice

Stoney71

Hi,

We are starting to investigate the best way to finance a £100k double storey extension where we will need to borrow £40-50k..
We are mortgage free on a £375k property at present & have endowments that will mature in September 2016 that will cover the cost of what we want to borrow.
We also have a 50% share in a second (buy to let) property that is tenanted, cost £125k & has a small mortgage of £12k remaining..
Can anyone advise the most cost efficient way of financing the extension project?
Many thanks..

ACG

Assuming the BTL mortgage is declared income then I imagine that would be the cheapest as you can usually offset any fees for the BTL mortgage and the interest against any tax on the profits.

But it would be worth sitting down with a broker to find a few options and possibly an accountant to discuss them with?

tvfreek

If affordable, borrowing on your residential property will be cheaper than your buy to let.

ACG

tvfreek wrote: »

If affordable, borrowing on your residential property will be cheaper than your buy to let.

The initial rate/fees might be less but once it comes to sorting out all of the tax on it that may no longer be the case.

Thrugelmir

ACG wrote: »

The initial rate/fees might be less but once it comes to sorting out all of the tax on it that may no longer be the case.

The BTL is only 50% ownership.

tvfreek

ACG wrote: »

The initial rate/fees might be less but once it comes to sorting out all of the tax on it that may no longer be the case.

I doubt you could claim the expense of building an extension off your buy to let income.

ACG

Its not claiming back the cost of the extension, its claiming back the interest/fees on the mortgage.

Either way, I did say may. Its worth investigating as it could save a small fortune.

Thrugelmir raises a good point however, I missed the bit about the shared ownership - this may be an issue in trying to secure a mortgage against it.