Borrowing issues

margaret_1981

Hi everyone!
I have a bit complicated finance situation . Not sure where to go to borrow money .
I have a mortgage since 10 years. Last year we have extended our house by 50%, We financed it from our savings. Didn't notify the bank about it .
We bought a land . We are building 2 houses for sale. We have run of of money . We didn't borrow anything for buying land or starting building a house either.
Now we need money. I know already it's hard to borrow money against a land.

What's the best option for us?

To go to our existing bank and pretend we didn't do the extension yet, so we want to borrow money for our extension.
OR
To go to the bank and tell them we did the extension so now our house is worth more, so we would like to borrow more money because of that (but we want to spend it on a new build house)My concern is - if whey will be happy to borrow the money for a new house, against our old, extended house.
OR
?????

Please advice

[Deleted User]

Definitely not the first option.

Depending on the amount you need, a remortgage would seem to be the only appropriate way forward.

Pixie5740

margaret_1981 wrote: »

Hi everyone!
I have a bit complicated finance situation . Not sure where to go to borrow money .
I have a mortgage since 10 years. Last year we have extended our house by 50%, We financed it from our savings. Didn't notify the bank about it .
We bought a land . We are building 2 houses for sale. We have run of of money . We didn't borrow anything for buying land or starting building a house either.
Now we need money. I know already it's hard to borrow money against a land.

What's the best option for us?

To go to our existing bank and pretend we didn't do the extension yet, so we want to borrow money for our extension.
OR
To go to the bank and tell them we did the extension so now our house is worth more, so we would like to borrow more money because of that (but we want to spend it on a new build house)My concern is - if whey will be happy to borrow the money for a new house, against our old, extended house.
OR
?????

Please advice

Are you sure that you needed to tell your mortgage lender that you were extending the property?

margaret_1981

I was only thinking about option 1 , as now, I regret we didn't go to the bank to borrow the money for our extension. We would have money to finish the new house now...

margaret_1981

I called the bank. I was told, that if we are going to do everything according to planning permission and building regulations, we don't have to notify them.

margaret_1981

we spent 60k on extension. we need about 60k to finish the new house

dealer_wins

Depending on your incomes and financial status you could go for a secured loan with either your mortgage company or other lender if more competitive.

margaret_1981

Thank you . Secured against our house or a land.

Would it make a difference to our bank-HSBC- if we come to borrow money before we started our extension rather than coming now, when it's finished?

Nebulous2

Why would it make a difference?

My thinking - if you wanted a loan to do an extension then you would be better to borrow it in advance then do it.

If you wanted to remortgage its better to do it afterwards because the house is now worth more and they have more security.

It's academic anyway - you can't do it in advance because the extension is built.

You certainly wouldn't want to get yourself in all sorts of trouble by telling them lies, would you?

margaret_1981

No, but I want to choose better option.
Extension is built but you can always find something else to do in our house.
Plus we paid the builders in cash. So we could say we still need to pay them for example...

Thrugelmir

margaret_1981 wrote: »

Thank you . Secured against our house or a land.

Your home would be the better option. As the unfinished development would be harder for the lender to sell on.