Stuck in middle of renovation

callansdad

HI all ... a little advice if you can.

In the middle of seriously renovating house .... things were worse than expected and to cut a long story short NO MONEY LEFT and only HALF THE WORK DONE.

the house is completely unimhabitable (living with relatives) and we desperately need more money to finish project.

The market value in current state will be less than my mortgage balance or approx same i need about extra 15K To completely finish house. Balance is currently 59K and finished value will be approx 90 - 95K.

My choices as i see it are remortgage if someone will touch us?

Personal loan (affordibility difficult)

Credit cards (Dont want to go there)

Any Ideas?

homer_j_3

Borrow off family? If not, I think you have pretty much covered it.

Could you convert existing mortgage to interest only to help affordability whilst you are finishing the work.

callansdad

Borrowing from family is a no go. Interest only worth thinking about.

Is there a mortgage company/bank that would consider a loan on this?

Future value as opposed to current value

homer_j_3

I think you may be struggling in this market tbh.

Are you tied into a deal at the moment.

callansdad

Yep, still tied to fixed rate of 5.85 till 2010

homer_j_3

so its going to cost even if you could

simcla

Are you talking about 15k to do the work yourself or paying others to do it? You could either pay for some of the work to be done by other people if you are doing the work yourself or ask the contractor(s) to employ more people to get the work done more quickly (after getting a quote to confirm the increase in cost in relation to the time-scale reduction) if you are employing other people already, then get a short term loan to pay for this and then re--mortgage when the work is completed to a level where you will get a re-mortgage.then pay off the loan. You would need to check that the cost of loan in less than the increased cost of getting the work done more quickly. You also need to make sure that the property will be worth what you are projecting for the purpose of re-
mortgaging, and what the costs of re-mortgaging to an increasedamount at the present time would be with your current lender, or the cost of re-mortgaging with another lender including early repayment charges would be.

silvercar

If you cannot raise the money to complete the work there are 2 options:

sell as is, probably to a builder who can see the potential. Problem with this idea is whether others willbe able to raise finance.

agree a profit split with a builder, they fiannce the completing of the project and then either you remortgage to pay off the builder or you sell the property and the builder gets his share of the profit.

toonfish

there is a lender who might finance this - depending on their assessment of current and future value - TMB.

Geenie

Callansdad, am I to assume by your name you have children? I only ask because if you have it puts a different slant on what I am going to say as to live on a building site with them would be unbearable but is possible.

You say you have 15k worth of work to finish the property. Is this to get it completely picture perfect to sell on or is your intention to live there yourself long term?

OH and I lived in a tip of a house for nearly 3 years before we got everything finished. We didn't have a proper kitchen for nearly 2 years as could only afford to buy one carcass a month on top of everything else we were trying to put right, and cooked off camping stoves until we could afford a cooker. A double inflatable mattress was our only bed for 18 months:o It wasn't pleasant at times I admit but we completed the house without any further debt and infact felt thrilled at what we achieved in the end.

What I am trying to say is if you can afford the mortgage just consider getting the basics sorted slowly, via a way you can afford. Incurring too much borrowing and possibly owing more then the house is worth is a risk which could cause future problems.

callansdad

Ok thanks for all your replies ... a few ideas to consider ..... i'll let you all know how we get on.

Thanks