I think we’re going to go bankrupt…desperate family of 4

ACG

berosej said:

Thanks everyone for the advice. I didn’t think we could go to another lender as we’re in the middle of the extension process? So when it comes to the valuation that would be tricky. Is that right?

If the house is habitable - secure, heated, hot water, then it should be ok. 

theoretica

You haven't said what timetable you are anticipating for finishing the work - or is it on permanent hold for lack of funds?  Have you spoken to an estate agent about whether the property really is unsaleable if you can't afford to finish the work?

How much of an increase could you afford?

How bad is the SVR if you don't go immediately for a new deal?  Worth calculating the cost of being on that for a few months while work finishes, compared to being stuck on a longer deal at higher LVT.

With the additional space, would you be able to take in a lodger to cover some of the increase?

[Deleted User]

As far as you have a working kitchen and toilet getting a mortgage with another provider should be possible.

Get a second opinion from another lender, increase the term and if struggling 6 months interest only.

silvercar

Do you have the money to finish the extension? If so, one option would be to use some of that money to pay the mortgage while you save up to complete the work. You could also decide to scale back the project.

alanyau88

I'm confused why and how you are in your predicament as surely the lender had stressed tested your affordability even if interest rates are now 4.5%?  Low rates are never going to last forever.  Without more information, I can't suggest what you are best to do apart from scaling down your extension dreams and borrowing funds to complete it asap.  If you can't do that, then sell asap and look to downsize.  

lojo1000

I agree with the last post. If you're at 83% LTV and assuming you've not missed any payments then you cannot have been in this mortgage long? 

It looks as if Halifax failed to responsibly assess your ability to repay the mortgage under stressed conditions; some might say, normal conditions. (And to be honest, I would not be surprised to see a class action lawsuit against mortgage providers who issued mortgages based on the expectations rates would never move over 5%).

I would be asking Halifax for their affordability assessment calculation done at the time of selling the mortgage to you. Quote Data Privacy laws if they initially say they cannot provide that. That will get them thinking through the issue and if they have made a mistake somewhere, perhaps them taking a closer look might reveal something which can help.

berosej

lojo1000 said:

I agree with the last post. If you're at 83% LTV and assuming you've not missed any payments then you cannot have been in this mortgage long? 

It looks as if Halifax failed to responsibly assess your ability to repay the mortgage under stressed conditions; some might say, normal conditions. (And to be honest, I would not be surprised to see a class action lawsuit against mortgage providers who issued mortgages based on the expectations rates would never move over 5%).

I would be asking Halifax for their affordability assessment calculation done at the time of selling the mortgage to you. Quote Data Privacy laws if they initially say they cannot provide that. That will get them thinking through the issue and if they have made a mistake somewhere, perhaps them taking a closer look might reveal something which can help.

Yes we were given a £90k additional borrowing two years ago. Since then both our salaries have jumped which is fantastic (in theory!) but this increase will wipes that away completely and then some.

had I not had an absolutely huge promotion we’d be in an even worse situation.

i will absolutely try this as looking at it now it is crazy that they offered this amount to us in the first place. 

Thank you to everyone else for the advice too. 

readysaverone

I'm sorry you find yourself in this situation!

What about going to a 40 year term and intrest only to try and bring down the repayments, just until you finish the job? Or maybe a mortgage holiday if you think you can do it fast and then sell? Good luck!

ReadySteadyPop

alanyau88 said:

I'm confused why and how you are in your predicament as surely the lender had stressed tested your affordability even if interest rates are now 4.5%?  Low rates are never going to last forever.  Without more information, I can't suggest what you are best to do apart from scaling down your extension dreams and borrowing funds to complete it asap.  If you can't do that, then sell asap and look to downsize.  

Good advice.

rc28

Some lenders provide development mortgages for newbuilds and extensions.

The ltv on these will be based on the final finished value, although the fees and interest rates will be higher it could be an option until the house is complete and remortgageble via mainstream lender.