Remortgage to fund extension & Improvements

sysadmin

Bit of back story.

Im 36, wife is 45. We have a 4 bed semi (loft conversion) in the Midlands.
We bought our house in 2008 for £143k with a 35 year mortgage. We have 3 children 15,10,8
Together, we earn roughly £65k pa before tax etc.Take home between us is around £3700pm (depending on overtime) Current mortgage payment is £760pcm which includes the initial mortgage and a loan attached to the mortgage which funded the loft conversion 4 years ago.
House is valued around £300k

My 5 year fixed is coming to an end next year and we would like to extend a bit more to finish the house off. This is our forever home btw. We'd be looking at blocking the side passage in, creating a laundry room, downstairs toilet, porch, new drive and new kitchen.

We will have 23 years left on the mortgage at the time of renewal.

Looking at our options. (based on mortgage comparison sites)

1. Stay as we are, remortgage for a better deal, still on 23 years remaining which brings the payments on a 5 year fixed from £760 to £600

2. Keep the mortgage payments roughly the same £760 and this will reduce the term from 23 years to about 18.

3. Borrow an additional 40k at the time of the remortgage to fund the home improvements above. This takes the payments from £760 to around £850 on a 5 year fixed, or £900 on a 10 year fixed.

We're a bit unsure what to do. On one side, the additional money left each month would be nice. we could use it to build a savings pot.

On the other side, we could really do with a laundry room and somewhere to hang all the washing in the winter. Plus as our kitchen is right off our living room, the washing machine being on is always really loud at night when watching the telly

I know there isnt really anyone who can decide apart from us, but just looking for opinions really.

djphig

If it was my house & i was in your exact position, personally i would borrow the 40k to fund the improvements. If this is your forever home, i don't see any point in waiting to get it done - interest rates are low at the moment.

What i would always say though is to try and make overpayments to your mortgage when you can

jamesp31

I’m after a bit of advice myself. I’m looking at some additional borrowing on my mortgage, what proof would a lender need regarding its use? Eg if I said I wanted a new car, would they expect to see a receipt? Or for home improvements, what would they want as proof the money was used as advised? Reason I ask is I actually want to pay off some debts and the advisor said as I couldn’t repay in full the debts they wouldn’t be able to lend, however if it was for a different use I’m sure I would get a different response. Can anyone help?