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  • FIRST POST
    • Compass
    • By Compass 14th Oct 19, 4:37 PM
    • 4Posts
    • 0Thanks
    Compass
    Options for loan to finance a large(ish) extension?
    • #1
    • 14th Oct 19, 4:37 PM
    Options for loan to finance a large(ish) extension? 14th Oct 19 at 4:37 PM
    Hopefully this is placed in the right forum and I haven't missed any obvious threads.

    Having looked online I'm not 100% sure what my options are for trying to raise funds for a 2 storey extension on our current property.

    Our mortgage is a few months away from ending its fixed period, the house has a conservative value of 260K, with just over 20% equity probably without digging out the statements.

    Looking at trying to raise 70K? No idea if that's even doable tbh, so would like some very broad advice from others who may have achieved similar please regarding what options there are.

    I've considered personal loans, second charge mortgages etc but wondered if there was anything else I'm missing.

    Cheers :-)
Page 1
    • zx81
    • By zx81 14th Oct 19, 4:38 PM
    • 24,087 Posts
    • 26,797 Thanks
    zx81
    • #2
    • 14th Oct 19, 4:38 PM
    • #2
    • 14th Oct 19, 4:38 PM
    You'll need a mortgage/secured loan, but you won't get that on the numbers you've given.
    • Compass
    • By Compass 14th Oct 19, 5:02 PM
    • 4 Posts
    • 0 Thanks
    Compass
    • #3
    • 14th Oct 19, 5:02 PM
    • #3
    • 14th Oct 19, 5:02 PM
    You'll need a mortgage/secured loan, but you won't get that on the numbers you've given.
    Originally posted by zx81
    Wow that took almost 60 seconds for the internet to !!!! on my chips!

    I shall see what other pearls come rolling in.......thank you for your input.
    • zx81
    • By zx81 14th Oct 19, 5:20 PM
    • 24,087 Posts
    • 26,797 Thanks
    zx81
    • #4
    • 14th Oct 19, 5:20 PM
    • #4
    • 14th Oct 19, 5:20 PM
    The only other option apart from savings is to break it up into smaller amounts, and try to borrow on credit cards/ smaller remortgage.

    However that leaves you susceptible to standard card rates when the promo periods end.
    • foxy-stoat
    • By foxy-stoat 14th Oct 19, 5:20 PM
    • 5,238 Posts
    • 3,158 Thanks
    foxy-stoat
    • #5
    • 14th Oct 19, 5:20 PM
    • #5
    • 14th Oct 19, 5:20 PM
    Wow that took almost 60 seconds for the internet to !!!! on my chips!

    I shall see what other pearls come rolling in.......thank you for your input.
    Originally posted by Compass
    You can test that out on your calculator yourself.

    Start stop watch

    Type 260000 * 20% = 52000

    Stop the stop watch

    That is amount of equity you have in your property - lenders wont let you release 100% of it, maybe 85% - so you dont have enough to pull out of your mortgage.

    Look to save up for a few years or sell and buy a bigger property.
    • Edi81
    • By Edi81 14th Oct 19, 8:10 PM
    • 734 Posts
    • 691 Thanks
    Edi81
    • #6
    • 14th Oct 19, 8:10 PM
    • #6
    • 14th Oct 19, 8:10 PM
    You should have some decent savings if you are looking to borrow money.

    Use them first then look into a loan.
    • swardean
    • By swardean 15th Oct 19, 7:52 PM
    • 55 Posts
    • 26 Thanks
    swardean
    • #7
    • 15th Oct 19, 7:52 PM
    • #7
    • 15th Oct 19, 7:52 PM
    Have a look at self build mortgage or loan providers, these may be able to assist you.

    The value of your house after the extension should increase, so it may be possible that you can mortgage well under the new house value.
    • djphig
    • By djphig 16th Oct 19, 10:18 AM
    • 48 Posts
    • 39 Thanks
    djphig
    • #8
    • 16th Oct 19, 10:18 AM
    • #8
    • 16th Oct 19, 10:18 AM
    Secured Loans or, as they're now known, 2nd charge mortgages will allow you to go up to 100% of your property valuation before the extension takes place. So the max borrowing against your property would be around 45k (taking into account fees which are normally added to the loan and a little give & take on the valuation figure). It won't be possible to borrow the full 70k
    Last edited by djphig; 16-10-2019 at 10:18 AM. Reason: forgot to finish!
    • enthusiasticsaver
    • By enthusiasticsaver 16th Oct 19, 5:43 PM
    • 9,405 Posts
    • 21,805 Thanks
    enthusiasticsaver
    • #9
    • 16th Oct 19, 5:43 PM
    • #9
    • 16th Oct 19, 5:43 PM
    As others have said there is insufficient equity in your property to borrow the full amount for the extension. Do you have any other debt and what is your income as you will also be checked for affordability.
    Early retired in December 2017

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