Borrow more than worth?

Jennifer_Davey

Hi All,

Just a quick question, if we can borrow up to £250k for a mortgage but the property we're looking at is only £235k can we borrow the extra £15k to build an extension?

Just wondering!

Thanks,

Jenn

ACG

No.
Typically 90-95% of the purchase price or valuation (whichever is lower). The rest would need to be paid from other means.

If after the extension is built and your income/credit supports it and the valuation has increased you could take out further borrowing/remortgage to wrap that up in to the mortgage, but lenders become restricted on debt consolidation about around 75% LTV. Have a chat with a broker before you do anything to discuss your options as it may mean who you choose to lend from for the purchase is not necessarily the cheapest now, but the most flexible when it comes to getting the extra...hopefully that makes sense.

Jennifer_Davey

That's great! Made enough sense!

Thanks

foxy-stoat

Jennifer_Davey wrote: »

Just a quick question, if we can borrow up to £250k for a mortgage but the property we're looking at is only £235k can we borrow the extra £15k to build an extension?

This would mean that you have zero deposit as well.

Forget about the extension and start saving for a deposit.