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Re-mortgage or loan for extension

edited 30 November -1 at 1:00AM in Mortgages & Endowments
2 replies 571 views
MrPieMrPie Forumite
4 posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hey all, just wanted to get a feel of what options there are for us in terms of acquiring money for a big extension we are looking to undertake.

There are 3 of us, 2 of whom work part time (£9k and £12k salary) and the third is full-time and earns i believe (£28k+commission) we are looking to extend our house outwards which includes increasing the size of 3 rooms. We already have a builder lined up who has given us a detailed quote amounting to £55k or there abouts.

There is no mortgage on our house as that was paid off quite some years ago and we are probably looking at taking out £60k as we have a chunk of money saved up for this project.

I would like to know what the best way to go about this is, should we try and get a loan out to the amount of £60k or should i look into what i've briefly seen, a LTV re-mortgage which (and correct me if i'm wrong) is a loan secured against the house and the amount given is a percentage of the value of the house?

Thanks in advance.

Replies

  • dimbo61dimbo61 Forumite
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    Most loans go upto £25/30K so well short of the amount you need.
    So really you need a mortgage.
    Consider an offset mortgage so you can borrow the amount you need but keep the money in the offset account and pay the builder bit by bit as he/she does the work.
  • minimike2minimike2 Forumite
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    OR listen to your mortgage advisor about the most appropriate product for you having completed a fact find.

    (Offset mortgages are not designed for short term offsetting and unless you have substantial other monies available to offset even after your building work is paid for then this would likely cause you higher costs in the long run).
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