best home improvements loans

alexxela

I recently bought a house  4 bed detach and I would like to make some improvement to the house. A top to bottom improvement which I believe will cost me around £70k ( transform the conservatory into extension, take down the wall between kitchen and diner and create an open space kitchen-diner, change all flooring, change all windows, new bathrooms. I believe this will add value to the house).
Is there a way to borrow that amount against my house( ie included in the existing mortgage) or can I take a separate loan for home improvements? 
Which are the best deals for this kind of loan?

Thank you,

[Deleted User]

Do you have sufficient equity for a further 70k for a secured loan of any sort?

If not, you're looking at unsecured, if your affordability is good enough. It's unlikely you'll get the sort of borrowing you need, so do the work in parts and use the time to save as well. 

alexxela

house price £350K and mortgage left is £278. value of house increased since to £370. would it be possible then? thx

[Deleted User]

Unlikely. It would take your borrowing up to £350, giving no wiggle room for lenders to repossess and sell the property.

alexxela

what if I am happy to pay extra per month? instead of £1100/month , to pay £1500 per month?
plus, if I make all the changes, the value of the house will increase. next door neighbour had same house, made improvements that I wanna make and his house was valued at £425k.
thank you

[Deleted User]

That doesn't give you more equity.

If you have disposable income, use that to reduce the amount you need to borrow.

alexxela

Deleted_User said:

That doesn't give you more equity.

If you have disposable income, use that to reduce the amount you need to borrow.

with the value at £425 and new mortgage at £350, that would be £75 equity? correct me if I am wrong. I am no expert. I am just exploring possibilities

[Deleted User]

No. You said your house is valued at £370k. 

You can't use a possible future value as an actual current value.

alexxela

Deleted_User said:

You can't use a possible future value as an actual current value.

clear now. thank you.

DrEskimo

What is your current mortgage product? Are you in a fixed term? What is the maximum a lender is willing to loan to you for a mortgage (typically 5x your household salary)?

If you are are in a mortgage product with a fixed term, you would have to pay early repayment fees to get a new mortgage with increased borrowing.

If you are not in a fixed term mortgage product with an early repayment fee, or your current provider is willing to add additionally borrowing as a separate part, AND the mortgage company are willing to lend you £348k, AND they value the house today at £370k, AND also willing to give you a 95% LTV mortgage, then you could get the additional money through secured borrowing.

A hell of a lot of 'ifs' though, and many (myself included) would suggest that 95% LTV is probably too high.

Perhaps some additional borrowing (considering the caveats above) plus unsecured loans/waiting and saving is the best option.
You can speak with a mortgage broker to see about your options with additional secured borrowing.

Thrugelmir

alexxela said:

what if I am happy to pay extra per month? instead of £1100/month , to pay £1500 per month?

Then overpay your current mortgage and build some more equity in the property.