Financing home extension

Smelly_Ellie

Looking for some ideas on the best way to raise funds for a single storey house extension, cost estimate £60k. This will double our downstairs area, and we currently have a kitchen the size of a broom cupboard! We have £10k put by already, and can probably get a credit card to put the kitchen on, so another £8-10k. Bought property approx 18 months ago for £350k, with an 85% LTV. The property was bought with planning permission and we definitely paid less than market value. We've paid off roughly £10k in that time on the mortgage... our 2year fix is up in the summer

We have spoken to our mortgage lender informally who have advised they expect the property is worth in the region of £380k now just based on the rise of house prices, and that we can borrow on our existing mortgage. Subject to having a valuation and them being happy we can likely raise the £40k this way.

I'd like to remortgage though once the work is complete, particularly as our fixed rate will be up around the same time as completion of building work, as looking at properties locally I'd expect it to be worth closer to £450k once complete (we are south east and frankly looking at what some properties are up for, I half wonder if we could get that now). So is borrowing on the mortgage the best way? We have no other debt apart from the mortgage and a joint income of £90k ish. We don't have any credit card accounts though so pot luck I guess on application success and eventual credit limits. We can't save up for it as we desperately need the additional space as we have a baby, and whilst our original plan was to save and do it in a few years, it's a nightmare with the tiny kitchen!

Cakeguts

You can only work out what the house will sell for by comparing it to similar houses in your road. Ones round the corner may not count because there may be something in that road that makes them worth more to start with. Every road has a top level of value and above that no one will pay you more for the house however nice the kitchen is.

Also market value for your house was what you paid for it. A house is only worth what someone will pay for it not some imaginary number dreamed up by an estate agent. The value of your house at the time you bought it was what you paid for it. Other houses might have a different market value but the value of yours was what you paid when you bought it.