Advice on additional mortgage borrowing

CaesandMarms

Hello all. I am looking for your pearls of wisdom on the below scenario.

I am 39, have 2 pre school children and have a household income of 133k PA. I am 3.5 years into a 5 year fix. Remaining mortgage is c.360k HPI house value is 605k.  Borrowing is minimal with £350 P/m on pcp for car.  Main source if expenditure is kids nursery fees which equate to c.1600 p/m.

Now the scenario. Our long term plan for the house we are living in is an L shape type extension aswell extension into the loft to create main ensuite. Initially the loft extension was the priority, but i have recently discovered a nasty mould type issue in the kitchen in the vicinity of an external tap at the side of the house. Given that there appears to be mushroom growth, I am expecting it may need some sunstantative work to rectify. The location happens to be where we were planning the L shape extension In due course.

I am not one for spending lots of money in an area that we will eventually be rebuilding soon, it doesn't seem like a efficient use of funds. Equally I am conscious that I still have 1.5 years left on my fixed mortgage and additional mortgage borrowing is my only option in respect of paying for the extension/s. I also appreciate that the rates aren't favourable and although there is a broad expectation that they will come down, there doesn't seem to be any agreement as to when this will be.

What would you do in a similar situation? Part of me does not want to be lumbered with shed loads of additional debt, but equally the pragmatic part of me thinks that now is the time to do it given my age and the "live in" benefits of getting the house how we want it at an early age and I will only be adding to the value of the house I any event. 


 

MattMattMattUK

CaesandMarms said:

Hello all. I am looking for your pearls of wisdom on the below scenario.

I am 39, have 2 pre school children and have a household income of 133k PA. I am 3.5 years into a 5 year fix. Remaining mortgage is c.360k HPI house value is 605k.  Borrowing is minimal with £350 P/m on pcp for car.  Main source if expenditure is kids nursery fees which equate to c.1600 p/m.

Now the scenario. Our long term plan for the house we are living in is an L shape type extension aswell extension into the loft to create main ensuite. Initially the loft extension was the priority, but i have recently discovered a nasty mould type issue in the kitchen in the vicinity of an external tap at the side of the house. Given that there appears to be mushroom growth, I am expecting it may need some sunstantative work to rectify. The location happens to be where we were planning the L shape extension In due course.

I am not one for spending lots of money in an area that we will eventually be rebuilding soon, it doesn't seem like a efficient use of funds. Equally I am conscious that I still have 1.5 years left on my fixed mortgage and additional mortgage borrowing is my only option in respect of paying for the extension/s. I also appreciate that the rates aren't favourable and although there is a broad expectation that they will come down, there doesn't seem to be any agreement as to when this will be.

What would you do in a similar situation? Part of me does not want to be lumbered with shed loads of additional debt, but equally the pragmatic part of me thinks that now is the time to do it given my age and the "live in" benefits of getting the house how we want it at an early age and I will only be adding to the value of the house I any event. 

Deal with the current leak, likely only a few hundred and you may well be able to fix it yourself.

For the extension the additional borrowing will be at a substantially higher rate, but rates are expected to fall. I would spend the next 18 months saving that additional money that would be spent to bring down the borrowing when you do borrow to extend, as well as getting proper architects plans done, assessing builders and getting planning completed, all of which could easily take more than a year anyway. Also factor in that a good builder is likely to be booked up for a year or more, so find a good builder rather than the possibly 2nd, 3rd rate, or total cowboy who could start in a few weeks/months.