increasing mortgage to fund extension

Hi,

We are toying with the idea of borrowing funds to do an exentsion and were wondering if increasing the mortgage is the best way to go about it or if there was a better option eg secure loans etc?

Bought the house nearly 4 yrs ago for £250,000 with £25,000 deposit so 90% LTV repayment mortage.

When our fixed rate comes to an end next year our outstanding mortgage will apparently be around £205,000.

House prices have risen significantly in our area (South London) recently and it's estimated value is now approx £330,000.

We haven't had any quotes yet but i think we'd need somewhere in the region of 30-40K for the building work we have in mind. Presumably this should also increase the property value further which would be great but it's not the main aim as we plan to stay put for a long time if we can have the work done.


So is going to see a mortgage advisior when our fixed rate is coming to an end and seeing if we can increase our borrowing the best way forward or is there another way worth considering?

Replies

  • TrickyDicky101TrickyDicky101 Forumite
    3.5K Posts
    Part of the Furniture 1,000 Posts
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    You would need to pass affordability checks if you wish to increase your mortgage borrowing - so were you maxed out on what you could borrow when you bought the house and have your circumstances materially changed (eg pay rises)?

    You won't be able to borrow against what the value of the property will be, only on what is is pre-work, please note.
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