Loan for house refurbishment and extension

Suzidil

Good morning,

I would greatly appreciate your advice with regards to home refurbishment financing: whether and how we can access those offers as a home owner (not a developer). The extra funds we require are about £500K to bring the value of a £2m house to over £3m. We hope to pay it over back over 36months or more.

If I may clarify, the house we would like to buy as our family home already has planning permission to extend and requires interior renovation/refurbishment. We already have Agreements in Principle to buy the house but need extra funds to do the works before moving in.

The current value of the house is around £2m. The only builder we have consulted with has provided a quote of about £380K+VAT for the works which we would like to allow £500K for after taking it out to tender.

Properties of a similar scale and scope after the works are on offer in the area for around £3.25m or above. We have no intention of selling the house and hope to make it our home for many years to come.

I understand that our mortgage lender, Barclays, will not be of much help since they effectively lend back the equity already paid on the mortgage which will not be enough to cover the cost of the works in the beginning.

After some preliminary internet research, I came across private finance options such as Property Development Finance, Refurbishment Finance and even Bridging Loans that seem to provide funds for such works but notice that they are either too short term or mostly directed at property developers.

Before I go further, may I please ask the members of this forum as to whether there are such loans available to us and where best to look for them.

Many thanks for your time in advance.

[Deleted User]

A remortgage is the only real option.

How much equity in the house?

somethingcorporate

This is probably on the wrong forum, this would be better under one of the housing ones given that the answer is likely to be mortgage related.

DCFC79

A mortgage would surely be the only option unless of course you earn alot of money. Why do you want to extend it ?

Nebulous2

Post on the mortgage forum. The process is likely to be in several phases. Possibly bridging finance and then remortgage once the work is complete and the valuation is sufficient.

Mark_Spade

Maybe you should post this to our sister Forum 'Money Spending Expert'.... are you sure £3 Million is enough? You'll look a plonker when your neighbors houses are all fetching £4 Million... :rotfl:

Clive_Woody

Suzidil wrote: »

I understand that our mortgage lender, Barclays, will not be of much help since they effectively lend back the equity already paid on the mortgage which will not be enough to cover the cost of the works in the beginning.

If there is less than £500k equity in the property, i.e. you owe more than £1.5million on a £2million property then obtaining a further advance of £500k may be challenging unless you are on a very high salary.

Could you hold off on the extension until you are in a better financial position?

foxy-stoat

Suzidil wrote: »

We hope to pay it over back over 36months or more.

At zero interest your monthly repayments will be £13,888 - whats your annual salary?

poppasmurf_bewdley

Mark_Spade wrote: »

Maybe you should post this to our sister Forum 'Money Spending Expert'.... are you sure £3 Million is enough? You'll look a plonker when your neighbors houses are all fetching £4 Million... :rotfl:

Yes, some schools have broken up early for half term. The OP should concentrate on doing the set homework.

Seriously, who would come onto a public forum seeking advice of this sort?

Herzlos

Unless you've got the equity in something, you've not got many options.


Can you move in as-is, and do the work in stages? If each one adds to the value, that should allow the bank to free up some equity.

DCFC79

Check out the other thread here https://forums.moneysavingexpert.com/discussion/5907857/extra-funds-for-refurbishment post number 7 might give a bit more information.