What can I do? Cant get a loan big enough...

rob98078

Hi

I live in a 3 bedroom semi in an area that I love. My wife and I would like another bedroom before we have anymore kids and because we have looked for months and cant find another, bigger house that ticks all the boxes its time to extend!

We have had quotes and have picked a build that would cost us £40k for another bedroom plus 3 alterations downstairs. We think we could finish the majority of the work for £55k.

We have enough equity in the house to remortgage for £25k which is not enough.

My question is if i remortgage my house and apply for a £25k personal loan will i be able to get both or will my credit score cause problems for applying for 2 large amounts of money close together?

I have a high annual salary with no other outstanding debt but i have been refused a homeowners loan because of my equity. Monthly payments are not an issue.

Thanks

dealer_wins

rob98078 wrote: »

Hi

I live in a 3 bedroom semi in an area that I love. My wife and I would like another bedroom before we have anymore kids and because we have looked for months and cant find another, bigger house that ticks all the boxes its time to extend!

We have had quotes and have picked a build that would cost us £40k for another bedroom plus 3 alterations downstairs. We think we could finish the majority of the work for £55k.

We have enough equity in the house to remortgage for £25k which is not enough.

My question is if i remortgage my house and apply for a £25k personal loan will i be able to get both or will my credit score cause problems for applying for 2 large amounts of money close together?

I have a high annual salary with no other outstanding debt but i have been refused a homeowners loan because of my equity. Monthly payments are not an issue.

Thanks

If monthly payments are not an issue, you should have thousands saved up towards this over the last few years?

Otherwise you spend all your income each month, and major new monthly commitments will be an issue as it will result in a sharp drop in your standard of living.

PS projects like this have a nasty habit or overrunning on costs and setbacks etc.

166million

Do you need to have more kids?

rob98078

dealer_wins wrote: »

If monthly payments are not an issue, you should have thousands saved up towards this over the last few years?

Otherwise you spend all your income each month, and major new monthly commitments will be an issue as it will result in a sharp drop in your standard of living.

PS projects like this have a nasty habit or overrunning on costs and setbacks etc.

Hi

I am 23, the reason i have no debt is because i have used all of my savings on the house deposit and my wedding. I could save up now but it would be years before i could even consider having that much money.

I should also point out that my mortgage is small £110k for a 3 bedroom house in my area is good. The banks will offer me a large mortgage but I would have to sell my house to release the deposit, but as I said I like the house and want to stay here.

rtho782

I'm guessing that the issue is you can only get a mortgage up to XX% of house value.

You could get a bigger mortgage based on your income on a more expensive house, but that obviously means moving.

The solution would be to talk to a bank about a "bridging loan", build the extension, and then get the house revalued. As the home value will have gone up, your maximum mortgage will have gone up, and you should be able to re-mortgage to pay off the bridging loan.

This is how people generally build self-build houses, as you can't get a mortgage for a whole house on an empty plot.

The issue will be if your £55k extension only increases your house value £20k, but if that's the case I'd question if it was a good buy anyway.

PeacefulWaters

Sometimes doing without is the answer.

Having raised three kids in a three bedroom house a fourth bedroom is nice to have. But not essential.

Vikipollard

You're 23...how many kids have you got already!! Sorry, nothing to do with the topic you asked about, I guess I was just surprised.

CLAPTON

It will depend a bit on the size of your bedrooms, but there is no reason why young children can't share a room : certainly up to 8 or 9 years old so there should be plenty of time to save up

can the job be split into two; so you can do the new bedroom now and the rest later?

flea72

Maybe rethink what you need. We considered extending to gain an additional bedroom upstairs, but the costs were beyond out finances. So we did a single storey extension instead (cost £20k) and gained more living space, which was more practical anyway with a larger family rather than Them all having their own bedroom.

We created a larger family room (open plan kitchen/dining/living) and turned our old smaller living room into a playroom. That way the kids who shared bedrooms could still escape to different rooms, and their shared bedroom wasnt cluttered with toys. As the kids got older and did want own rooms, we turned the playroom into our bedroom. We now sleep downstairs and kids all have own bedrooms upstairs.

In our area, there also isnt much of a call for 4-bed semis, but houses with large living areas are popular and gain a premium

rob98078

Yes you are all right, i have a 1 year old. My 3rd room is more like a closet which would be possible to sleep in but less than ideal. I suppose I am thinking I want to get all of the building work done now before we get another baby on the scene. I shared a room growing up so I know there is no harm done, but I suppose as parents you will agree that you want the best you can get for your kids!

The thing that annoys me is the bank will give me a mortgage 3x the value of my current one (not that I have the deposit) but I cant get much more on this one.

Obviously if it cant be done, it cant be done but taking a loan over 20 years running along side my mortgage is still considerably cheaper than buying a 4 bedroom house in my area!

rob98078

flea72 wrote: »

Maybe rethink what you need. We considered extending to gain an additional bedroom upstairs, but the costs were beyond out finances. So we did a single storey extension instead (cost £20k) and gained more living space, which was more practical anyway with a larger family rather than Them all having their own bedroom.

We created a larger family room (open plan kitchen/dining/living) and turned our old smaller living room into a playroom. That way the kids who shared bedrooms could still escape to different rooms, and their shared bedroom wasnt cluttered with toys. As the kids got older and did want own rooms, we turned the playroom into our bedroom. We now sleep downstairs and kids all have own bedrooms upstairs.

In our area, there also isnt much of a call for 4-bed semis, but houses with large living areas are popular and gain a premium

Thanks for the idea!

I also thought about the extension downstairs, problem is to build above in the future, my foundations need to be deeper and alot of my house would have to be rebuilt anyway which keeps the cost up. If I cant get the money I meed i have also been quoted 10k for a livong space extension which would make a difference and add good value to the house.