Extra borrowing for extension (and pay off loan?!)

DIYnovise

3 years into 5 year fixed with Tesco at 2.19%. Would like to pull out £50k to fund extension on house and have meeting to Tesco mortgage advisors Friday to discuss. Extra borrowing would be 2.4% for 2 years. I wanted to use it as opportunity to also pay off personal loan I have also with Tesco (£7k for car) which is 4.6% and would save us £279 per month mitigating extra mortgage repayments. I get that over the full term this would work out worse, but we have a baby on the way and the extra monthly saving would be welcomed.

In my meeting Friday should I tell Tesco the funds would be for extension and to consolidate car loan? Or would they frown upon this and be less likely to loan or should I say it’s just for the extension?

Thanks !!!128512;!!!128514;

foxy-stoat

Obtaining funds by deception is fraud so probably best to be upfront with how you want to spend the money.

From the lenders point of view you are turning unsecured debt into secured debt, reducing your monthly expenses so better for affordability.

Have you been out to builders to get a few quotes for the extension already?

pinklady21

I approached my mortgage lender (not Tesco) a few years ago for additional mortgage funds for an extension project. They asked me to supply confirmation that I had planning permission and some builder's estimates as part of their due diligence before they would complete the additional loan.

DIYnovise

pinklady21 wrote: »

I approached my mortgage lender (not Tesco) a few years ago for additional mortgage funds for an extension project. They asked me to supply confirmation that I had planning permission and some builder's estimates as part of their due diligence before they would complete the additional loan.

Thanks for your reply. I’ve only used the £1500 per square metre rule so far. Wasn’t keen on spending on Architect then planning application fees (all in circa £2k) only to be told that bank won’t lend. Was hoping to go the other route really. I suppose I’ll ask bank for the advise on this when I discuss

pinklady21

I was able to apply for the additional borrowing, and it was approved, subject to me sending them the appropriate permissions etc.

onthego

The architect thing is a nightmare isn't it! I'm looking at getting a mortgage for home improvement, they want quotes but it's scary shelling out thousands on an architect in order to get quotes. They said I'd have to get a loan for the architect then consolidate it into the mortgage...but what if they don't give the mortgage! I'm surprised there's not an easier way around this dilemma, it must affect a lot of people.