Borrow more for extension

MadamBT

Hello

We're thinking about an extension, but have hit a bit of a roadblock after talking to our current mortgage provider. Long story short, if we wanted to buy a new house, based on our income they'd lend us quite a lot of money, but if borrowing more to extend our current house they'll only lend us about half of what we think we need. The logic obviously being that we would borrow against the current value of the house (which isn't an awful lot), not the value the house would have after the extension. Is there a way around this?

Many thanks!

foxy-stoat

MadamBT wrote: »

Hello

We're thinking about an extension, but have hit a bit of a roadblock after talking to our current mortgage provider. Long story short, if we wanted to buy a new house, based on our income they'd lend us quite a lot of money, but if borrowing more to extend our current house they'll only lend us about half of what we think we need. The logic obviously being that we would borrow against the current value of the house (which isn't an awful lot), not the value the house would have after the extension. Is there a way around this?

Many thanks!

Not really.

You need to save up, take out some money transfer and balance transfer credit cards, or loan.

Be sure the cost of the extension and be prepared for the lender not to agree with the amount of value you have added if you want to re-finance to clear the credit cards/loans.

Thrugelmir

MadamBT wrote: »

Is there a way around this?

Overpay your mortgage. Thereby speeding up repayment and in the process building more equity.

Alternatively take the risk of borrowing at much higher rates and consolidating into the mortgage once the build is finished. Not something that I'd advocate personally.

ACG

Borrow whatever you can get, do what you can and use credit cards/unsecured loans to finish it off - then remortgage? (This assumes the lender will lend for debt consolidation at such a high LTV).