Equity to fund extension project?

mawk86

Hello everyone, 

We are in the process of adding a single storey rear extension and double storey side extension, however with the rising cost of materials we don’t think we will be able to afford to complete our plans with the money that we have. We are considering just finishing the single storey to both sides and then adding the second storey when we can afford to completely finish. 

Our current mortgage is £179k and our house value pre extension is £239k. We have been advised that the single storey extension alone will increase our house value to £280k. Our fixed mortgage term ends in Sept 2024. 

We will need approx £18k to complete the second story extension. It has been suggested that we try to use some equity in the property to fund this - we have no idea about this option, so are looking for any advice on this process and thoughts on if this might be a feasible option to look into? 

Thank you 

hayley_85

We did this to fund our extension. You just call up whoever you have the mortgage with and tell them how much you want to borrow and what you're using the money for and if there's enough equity in your house (ours had a 85% LTV limit) and you can pass the affordability test then they'll send you the money. We had the money through within 4 weeks of asking with Santander. Our mortgage statement shows two amounts, the first one when we bought the house with its interest rate and deal end date and then the second loan we took out with its own seperate interest rate and deal end date.

mawk86

Thank you, that’s really helpful! Did you need to get builders quotes etc? 

secla

You can borrow on equity of the houses value now but not what it will be worth when done. So assuming you have enough equity now then you just re-mortgage 

hayley_85

mawk86 said:

Thank you, that’s really helpful! Did you need to get builders quotes etc? 

No they didn't ask for anything. They asked what the money was for, I said to build an extension and then it was never mentioned again.