Advice on how to fund house extension

giraffe1234

We are investigating on how to fund a large house extension. Our house is apparently worth £330,000ish and we have just over £100,000 equity. We have been given a quote of £50,000 to get the shell built.


Our current mortgage lender will only lend us an extra £20,000 (which will take us up to the 5x salary limit) and we are now looking into funding the extra bit via a personal loan. Any advice would be much appreciated? It's annoying as it would obviously be easier to add the lump onto the mortgage and we can afford the higher monthly payments as we do not have any other loans, no children etc..


Once the work is complete the house will hopefully be worth £450,000-£500,000 judging on recent sales nearby so it is definitely worth investing.


Thanks in advance!

[Deleted User]

You could look at a separate loan. But it could be challenging, as it's a large sum, let along with additional borrowing going on elsewhere.

foxy-stoat

Deleted_User wrote: »

You could look at a separate loan. But it could be challenging, as it's a large sum, let along with additional borrowing going on elsewhere.

You would need to advise the lender, or lie, when they ask you the question about possible future borrowing when you remortgage.

If its £50k to get the shell built, then how much extra for plastering, painting, electrics, heating, kitchen, bathroom, toilets & fittings etc etc.

How you got a quote to get everything finished?

PeacefulWaters

Save.
Borrow.
Wait until you can afford it.

I think you're stretching yourselves.

Helvetica_Van_Buren

Spend less.
Earn more.
Sell things.
Save.

jonesMUFCforever

Move house.

giraffe1234

We can afford the higher monthly payments comfortably, I'm sure there's others in a similar situation. The lender initially said they would lend us £50,000 although I think we must have spoken to someone who didn't actually understand how the lending works! We're still looking at getting other quotes but the size of the project means it will be a hefty amount. We don't want to move as the house will be prefect when done and it's a prime location where houses don't come up that often.

somethingcorporate

Remortgage elsewhere?

Talk to a broker.

How much is the full build if £50k is only the shell?

giraffe1234

£75,000? Although we are still waiting on a few quotes. It can be done in stages as the upstairs is less urgent. Even remortgaging any other lender will only take 5x salary into account. Although borrowing £50,000 would put us just below 85% LTV which is common maximum.

PeacefulWaters

If interest rates rise 5% over the next five years, could you afford it?

giraffe1234

Obviously I can't predict what will happen. But with our current situation, yes.