Extra borrowing to buy land plus pay off loan

DIYnovise

Hi all

Would be grateful for views before approaching tesco bank. Neigbours at the back of our garden want to sell us 1/4 acre of their garden (£35k). They ve given is first refusal. Would mean getting extra borrowing from bank. We have a £4K car loan outstanding and would preferably like some of the money that comes from the extra borrowing to pay car off. (So total £39k) In this case we would pay £180 less per month (even with the extra mortgage).What are mortgage companies like regarding paying off existing loans with some cash from the mortgage?! 👍🏻😀

dimbo61

Well this depends on the outstanding mortgage you already have, the value of your property, equity in the property and what the surveyor think the extra land is worth.
You income, age, dependants, debts and credit score/history.

Dark_Star

Is the land really worth £35,000 for quarter of an acre?


It's usually £10,000 per whole acre for bog standard field/pasture/grazing & a small bit of someone else's garden would a lot less. (Unless gold plated with oil wells/gold mines underneath it).


Are you in the middle of prime building land & they're thinking this would become a building plot or something?


£3,500 for a quarter acre maybe but not £35,000!


Have you had an independent valuation done?

AnotherJoe

DIYnovise wrote: »

Hi all

Would be grateful for views before approaching tesco bank. Neigbours at the back of our garden want to sell us 1/4 acre of their garden (£35k). They ve given is first refusal. Would mean getting extra borrowing from bank. We have a £4K car loan outstanding and would preferably like some of the money that comes from the extra borrowing to pay car off. (So total £39k) In this case we would pay £180 less per month (even with the extra mortgage).What are mortgage companies like regarding paying off existing loans with some cash from the mortgage?! 👍🏻😀

So they are valuing land in your vicinity at £120k/acre? Is this with outline planning permission? Otherwise I think they are taking the michael, no ones going to pay you an extra £35k for your house just because its got a bigger garden.


Also, if you would pay £180/month less on a new mortgage why arent you on that new mortgage anyway?