Options for loan to finance a large(ish) extension?

Compass

Hopefully this is placed in the right forum and I haven't missed any obvious threads.

Having looked online I'm not 100% sure what my options are for trying to raise funds for a 2 storey extension on our current property.

Our mortgage is a few months away from ending its fixed period, the house has a conservative value of £260K, with just over 20% equity probably without digging out the statements.

Looking at trying to raise £70K? No idea if that's even doable tbh, so would like some very broad advice from others who may have achieved similar please regarding what options there are.

I've considered personal loans, second charge mortgages etc but wondered if there was anything else I'm missing.

Cheers :-)

[Deleted User]

You'll need a mortgage/secured loan, but you won't get that on the numbers you've given.

Compass

Deleted_User wrote: »

You'll need a mortgage/secured loan, but you won't get that on the numbers you've given.

Wow that took almost 60 seconds for the internet to !!!! on my chips!

I shall see what other pearls come rolling in.......thank you for your input.

[Deleted User]

The only other option apart from savings is to break it up into smaller amounts, and try to borrow on credit cards/ smaller remortgage.

However that leaves you susceptible to standard card rates when the promo periods end.

foxy-stoat

Compass wrote: »

Wow that took almost 60 seconds for the internet to !!!! on my chips!

I shall see what other pearls come rolling in.......thank you for your input.

You can test that out on your calculator yourself.

Start stop watch

Type 260000 * 20% = 52000

Stop the stop watch

That is amount of equity you have in your property - lenders wont let you release 100% of it, maybe 85% - so you dont have enough to pull out of your mortgage.

Look to save up for a few years or sell and buy a bigger property.

Edi81

You should have some decent savings if you are looking to borrow money.

Use them first then look into a loan.

swardean

Have a look at self build mortgage or loan providers, these may be able to assist you.

The value of your house after the extension should increase, so it may be possible that you can mortgage well under the new house value.

djphig

Secured Loans or, as they're now known, 2nd charge mortgages will allow you to go up to 100% of your property valuation before the extension takes place. So the max borrowing against your property would be around 45k (taking into account fees which are normally added to the loan and a little give & take on the valuation figure). It won't be possible to borrow the full 70k

enthusiasticsaver

As others have said there is insufficient equity in your property to borrow the full amount for the extension. Do you have any other debt and what is your income as you will also be checked for affordability.