Borrowing money against my home for extension

snoop321

Hi everyone,

I'm looking to borrow 100k against my home so I can build a double story extension. The extension doubles the sq meters, so it worth doing rather then moving.

The question I have is, can I just remortgage my home or apply for a mortgage? I don't owe anything on the property and I dont have and other loans/credit cards. 

I have a good salary, so it won't be a problem borrowing the money but I'm not sure how it works when I want to borrow money against my property.

Appreciate the advice and if someone could put me in the right direction

Thanks

Brie

This bit from Halifax outlines things nicely.  Not a recommendation of using them, I've never had any business to do with them it's just this was the first sensible chat about it I saw.

How To Finance a House Extension | Halifax

You're obviously in the early stages of planning so while you think about what you want to build make sure your credit history is ready to help you achieve it.  You say you don't have a mortgage currently and don't have any other loans or credit cards.  All this might not count in your favour as there's very little for a bank to go by to judge their risk.  You might want to take out a credit card, use it monthly to buy your food or your petrol and set it up so that the DD will pay it off in full every month.  That will give a bank something to look at and be please about.  Also make sure you are on the electoral  roll as that shows stability apparently.  

And check your credit reports (free ones only!!) to see if there's anything that's snuck on there you don't know about - a CCJ from parking too long somewhere or similar.  Once you know what is (or isn't there) you can start sorting that.  Anything new will take 2 - 3 months to show up.

snoop321

Thanks for taking the time to read my post,

I have 2 credit cards with 10,000 limits but with both 0 balances 

I'm hoping I can just take a mortgage out rather than apply for 'home loan' as the rate is a lot cheaper.

Now I actually bank with Halifax, I might just give them a call and see what options they have. Ideally I just want a fix for 5 years and after that pay what I can to finish it all off.

amnblog

You just need a re-mortgage for an unencumbered property to raise funds for Home Improvement (get an estimate for the work unless you already have one). Halifax or another Lender - Pretty straightforward.

gazb_2

Just a remortgage. We bought our home for 400k outright and then remortgaged borrowing £200k. It was to extend/renovate the house. The lender never needed any quotes or plans for the works

Bigphil1474

Worth getting the quotes first though, as you don't want to borrow more than you need but you don't want to be short on funds to get it finished either. Bear in mind there'll be planning permission to go through, as well as architectural costs i.e. it's not just the building bit.

snoop321

Thanks for everyone's advice, I'm glad I can just go straight forward with remortgage.

 gazb_2 said:

Just a remortgage. We bought our home for 400k outright and then remortgaged borrowing £200k. It was to extend/renovate the house. The lender never needed any quotes or plans for the works

How long did the application take? I'm planning on starting and then borrowing what I need once I get a better idea.

Planning permission is sorted, I've got quotes and i have added around aroind 25% extra for internal finishes like kitchen/bathroom. 

I have some money to get it started like, foundations then walls up. I would never pay all the money up front, maybe 5 installments.

MWT

snoop321 said:

How long did the application take? I'm planning on starting and then borrowing what I need once I get a better idea.

Be careful with starting before getting the mortgage, as it can complicate matters if your property is a building site when the lenders does its valuation...

... especially if facilities like the kitchen or bathroom are impacted...