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  • FIRST POST
    • margaret_1981
    • By margaret_1981 12th Feb 18, 11:02 AM
    • 8Posts
    • 2Thanks
    margaret_1981
    Borrowing issues
    • #1
    • 12th Feb 18, 11:02 AM
    Borrowing issues 12th Feb 18 at 11:02 AM
    Hi everyone!
    I have a bit complicated finance situation . Not sure where to go to borrow money .
    I have a mortgage since 10 years. Last year we have extended our house by 50%, We financed it from our savings. Didn't notify the bank about it .
    We bought a land . We are building 2 houses for sale. We have run of of money . We didn't borrow anything for buying land or starting building a house either.
    Now we need money. I know already it's hard to borrow money against a land.

    What's the best option for us?

    To go to our existing bank and pretend we didn't do the extension yet, so we want to borrow money for our extension.
    OR
    To go to the bank and tell them we did the extension so now our house is worth more, so we would like to borrow more money because of that (but we want to spend it on a new build house)My concern is - if whey will be happy to borrow the money for a new house, against our old, extended house.
    OR
    ?????

    Please advice
Page 1
    • zx81
    • By zx81 12th Feb 18, 11:08 AM
    • 17,280 Posts
    • 18,388 Thanks
    zx81
    • #2
    • 12th Feb 18, 11:08 AM
    • #2
    • 12th Feb 18, 11:08 AM
    Definitely not the first option.

    Depending on the amount you need, a remortgage would seem to be the only appropriate way forward.
    • Pixie5740
    • By Pixie5740 12th Feb 18, 11:15 AM
    • 12,190 Posts
    • 17,218 Thanks
    Pixie5740
    • #3
    • 12th Feb 18, 11:15 AM
    • #3
    • 12th Feb 18, 11:15 AM
    Hi everyone!
    I have a bit complicated finance situation . Not sure where to go to borrow money .
    I have a mortgage since 10 years. Last year we have extended our house by 50%, We financed it from our savings. Didn't notify the bank about it .
    We bought a land . We are building 2 houses for sale. We have run of of money . We didn't borrow anything for buying land or starting building a house either.
    Now we need money. I know already it's hard to borrow money against a land.

    What's the best option for us?

    To go to our existing bank and pretend we didn't do the extension yet, so we want to borrow money for our extension.
    OR
    To go to the bank and tell them we did the extension so now our house is worth more, so we would like to borrow more money because of that (but we want to spend it on a new build house)My concern is - if whey will be happy to borrow the money for a new house, against our old, extended house.
    OR
    ?????

    Please advice
    Originally posted by margaret_1981
    Are you sure that you needed to tell your mortgage lender that you were extending the property?
    • margaret_1981
    • By margaret_1981 12th Feb 18, 11:15 AM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    • #4
    • 12th Feb 18, 11:15 AM
    • #4
    • 12th Feb 18, 11:15 AM
    I was only thinking about option 1 , as now, I regret we didn't go to the bank to borrow the money for our extension. We would have money to finish the new house now...
    • margaret_1981
    • By margaret_1981 12th Feb 18, 11:16 AM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    • #5
    • 12th Feb 18, 11:16 AM
    • #5
    • 12th Feb 18, 11:16 AM
    I called the bank. I was told, that if we are going to do everything according to planning permission and building regulations, we don't have to notify them.
    • margaret_1981
    • By margaret_1981 12th Feb 18, 11:17 AM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    • #6
    • 12th Feb 18, 11:17 AM
    • #6
    • 12th Feb 18, 11:17 AM
    we spent 60k on extension. we need about 60k to finish the new house
    • dealer wins
    • By dealer wins 12th Feb 18, 3:39 PM
    • 5,801 Posts
    • 11,068 Thanks
    dealer wins
    • #7
    • 12th Feb 18, 3:39 PM
    • #7
    • 12th Feb 18, 3:39 PM
    Depending on your incomes and financial status you could go for a secured loan with either your mortgage company or other lender if more competitive.
    Choose life
    • margaret_1981
    • By margaret_1981 12th Feb 18, 5:13 PM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    • #8
    • 12th Feb 18, 5:13 PM
    • #8
    • 12th Feb 18, 5:13 PM
    Thank you . Secured against our house or a land.

    Would it make a difference to our bank-HSBC- if we come to borrow money before we started our extension rather than coming now, when it's finished?
    • Nebulous2
    • By Nebulous2 13th Feb 18, 8:04 AM
    • 1,889 Posts
    • 1,131 Thanks
    Nebulous2
    • #9
    • 13th Feb 18, 8:04 AM
    • #9
    • 13th Feb 18, 8:04 AM
    Why would it make a difference?

    My thinking - if you wanted a loan to do an extension then you would be better to borrow it in advance then do it.

    If you wanted to remortgage its better to do it afterwards because the house is now worth more and they have more security.

    It's academic anyway - you can't do it in advance because the extension is built.

    You certainly wouldn't want to get yourself in all sorts of trouble by telling them lies, would you?
    • margaret_1981
    • By margaret_1981 13th Feb 18, 10:53 AM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    No, but I want to choose better option.
    Extension is built but you can always find something else to do in our house.
    Plus we paid the builders in cash. So we could say we still need to pay them for example...
    • Thrugelmir
    • By Thrugelmir 13th Feb 18, 11:04 AM
    • 58,946 Posts
    • 52,274 Thanks
    Thrugelmir
    Thank you . Secured against our house or a land.
    Originally posted by margaret_1981
    Your home would be the better option. As the unfinished development would be harder for the lender to sell on.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • BorisThomson
    • By BorisThomson 13th Feb 18, 12:41 PM
    • 1,586 Posts
    • 3,426 Thanks
    BorisThomson
    No, but I want to choose better option.
    Extension is built but you can always find something else to do in our house.
    Plus we paid the builders in cash. So we could say we still need to pay them for example...
    Originally posted by margaret_1981
    Despite all the good advice to the contrary, you seem intent on lying. Do you think this is acceptable?
    • margaret_1981
    • By margaret_1981 13th Feb 18, 12:52 PM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    I think its not for you to judge.
    • JimmyTheWig
    • By JimmyTheWig 13th Feb 18, 2:15 PM
    • 11,652 Posts
    • 11,256 Thanks
    JimmyTheWig
    I think its not for you to judge.
    Originally posted by margaret_1981
    Maybe posting on a public forum wasn't the best idea for you...
    • JimmyTheWig
    • By JimmyTheWig 13th Feb 18, 2:16 PM
    • 11,652 Posts
    • 11,256 Thanks
    JimmyTheWig
    Why would it make a difference?
    ...
    If you wanted to remortgage its better to do it afterwards because the house is now worth more and they have more security.
    Originally posted by Nebulous2
    A remortgage, at least with the same mortgage company, will lead to questions about why they want the money. Extending the house may have got approval without further questions. Building a new house may well get the mortgage company asking further questions and maybe refusing the loan.
    • spadoosh
    • By spadoosh 13th Feb 18, 2:26 PM
    • 5,204 Posts
    • 7,018 Thanks
    spadoosh
    I think its not for you to judge.
    Originally posted by margaret_1981
    Youre making this hard work for yourself.

    Look at the big picture. Essentially you'll have assets worth £xxx and youll have debt worth £xx and your wanting to borrow some money. You really shouldnt need to be lying. Youve financed a lot of this stuff yourself so i cant see their being too many issues short of affordability. Id imagine theres quite a bit of capital to secure any debts against so that really shouldnt be an issue.

    As long as you can afford to pay the additional cost of borrowing (as opposed to relying on selling the properties to repay) than there really shouldnt be problems with what you want to do.

    Lying will create problems, especially when it doesn't appear to be necessary.

    Just go to your bank (after doing the sums to work out if you can afford the monthly payments) tell them you want to remortgage your property after its extension to fund a house build.
    Don't be angry!
    • margaret_1981
    • By margaret_1981 16th Feb 18, 12:40 PM
    • 8 Posts
    • 2 Thanks
    margaret_1981
    Thank you very much for your advice. Especially Spadoosh.
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