Mortgage and house extension

hulahoop09

Hiya


Sorry not sure if the correct part (can admin move it to the right place if not? Thank you :-) )


We took out a mortgage in 2008 house was 110000 and we took out a mortgage for 80000. We have approx. 60000 left on the mortgage which ends in 17 years time, I will be 50.


It is a small 2 bed starter home. Living room (with stairs in it), kitchen, 2 bedrooms and a bathroom. We have a drive (not used as we don't drive) and grass land on the side which is ours. We have 2 young children (almost 5 and almost 3) who share a room. At some point in the future we will need to move or extend (ideally by time oldest is approx. 10) so they have their own room. Now the houses are struggling to sell for 80k so have dropped dramatically since we brought ours. I don't see this recovering at all to what we paid so there would be no chance of us remortgaging I don't think? Another option is to move and try get a bigger mortgage and extend term or try to take out a long term loan alongside the mortgage for a single story extension. This wont be happening just yet as we cant afford all that comes with it and are getting us in a better position etc. I was just wondering what our options are for the future and what works out best?


Worst case scenario a stud wall will be put up and the kids can have a small room each! Lol.


TIA

cahillg81

Get an estate agent to value it now and also give you an after work value and you can determine what works best.


You could re-mortgage to a better rate and take some additional borrowing to cover the cost of an extension and it will probably work out cheaper than going down the unsecure route. There are lenders who will give you up to 90% LTV for this work so if figures above are accurate you could get £12,000 for the works. You shouldn't incur to much in terms of charges for the remo.


There are some lenders who will base the valuation on completion of work.


Speak to a broker after speaking to an estate agent and weigh up your options from then.

hulahoop09

Thanks!! I will keep this in mind for future reference. Sadly an extension is likely to cost approx. £25000 I believe which is why we would struggle to get the money together for this. We have been with Halifax since 2008 so will need to look at options when we are ready I believe they offer 85% LTV. Im a stresshead and it is all worrying me although I do count myself lucky we have a home and the kiddies are happy! :-)

Thrugelmir

Can you afford to make overpayments on the mortgage. By doing so you'll reduce the amount you owe and also increase the equity available at the time you decide to move. How much you commit to overpaying is a personal choice. As your income can only be spent on so many things. If you really want to move then you can influence the outcome yourselves.

House prices are relative. So while yours has fallen so will the properties in the band above you. In a rising market it's actually harder to bridge the gap than in a falling one.

cahillg81

But you are not tied to Halifax, you can change lender.


Don't stress it's not good for you. Get a valuation done first and then make a decision.

hulahoop09

Unfortunately we cant afford to make overpayments atm. We kind of would prefer to stay as this is the only house we have lived in together, ideal quiet area and ideal neighbours and as we don't drive it works for us both work wise.


Thanks! I will check it out and at least I have some ammo for future reference, I am sure you will see me here again in 5 years!! Lol.

Thrugelmir

hulahoop09 wrote: »

Unfortunately we cant afford to make overpayments atm.

By overpayment I'm not suggesting a huge sum. Whatever you can afford will start the ball rolling.