Mortgage, secured loan or other?

frankiegibson

Hi, I have searched but couldn’t find anything like an answer to our very specific query.

My mum passed away last year and we have inherited her house.  I have a mortgage in my name on our current property with around £20k of equity.  My OH has a mortgage on his previous family home which he’s keeping on to keep a roof over their heads with the intention of passing it on to the kids in the future.

Before we move into our new place, we would like to add an extension and it needs updating.  This requires us to raise some money, preferably now so we can have the building work completed before we move in.  We have had quotes which will take the work to around £60k (which includes a contingency as you never know) on a property currently valued at around £190k.

We both have above average credit scores and are in well paid jobs, affordability wouldn't be a problem.

I have checked with my bank who have offered a mortgage in principle, but only when we have sold our current house (it is on the market) but would mean us moving in and a few months of living in a construction site.

I have enquired about getting a secured loan, which they are happy to provide but wanted a £12,000 fee, which of course they are happy to roll into the loan so we would pay interest on it.

My question is, should we just suck it up and wait for our house to sell, move in and have the building work done around us, should we go ahead with a secured loan and just accept the charges or is there another option which we are unaware of?

Any help and advice would be much appreciated.  Thanks in advance.

kingstreet

Speak to an independent broker. There should be cheaper options. Worst case scenario there should be a lender which simply aggregates the total mortgage debt and ensures affordability is met. There will be fewer lender options until the property has been in your ownership for six months.