Are we doing ok here?

[isthatagoat]

Struggling to understand if we are making horrendous decisions or not!

Bought our 280k home 10 years ago with a mortgage of £250k.

We additionally borrowed 40k to renovate the house and add an extension which is now complete.

The house is now worth about 460k and we owe 260k.

We are considering releasing a further 40k to go up in to the loft for an extra bedroom. We hope to make this back in the value of the home. But owing 300k if we do this is putting me off, as that's more than we owed when we bought the house 10 years ago!

Yes I know the house is worth more so more equity, but you don't actually SEE that money do you? Our kids will one day of course hopefully.

We love our home and the loft would mean we stay for another 7-10 years. Also a house down our road sold for 550k with the loft done about 5 years ago.

Just wondering - WWYD?

To add we have no other debt and the repayments if we release some extra ££ are fine.

How old are you, how long is your mortgage? If you are younger, feel comfortable with the new monthly repayments, and this is going to make a massively difference in your enjoyment of your house and keep you there longer, then might well be worth it.

i personally don’t focus to much on return on investment of home improvements if you are 10 years or more from wanting to sell- at some point a house is a home, not just an investment

40k sounds very cheap for a loft extension, though I don’t know the details of what you are doing. Would make sure you are comfortable with a healthy contingency if it goes over budget

Thanks @Labraradabrador

My DH is in the building trade so he does most of it himself luckily.

We are both mid 30s and currently have 25 years left to pay and would try and keep the term about the same.

You're right I think - we know it's what we want to do. It's just daunting seeing the amount we owe go up and not down, although I know we've increased the equity but what does that actually mean as you never get the money really do you. Unless you downsize (or die and kids get it!). We don't plan to downsize really at any point!

Most people take on bigger mortgages when they move at your age (usually to get a family home)- this is just a different way of getting the space you need.

very jealous of you for having a husband in the building trade- we would be so much better off if either dh or I had any practical skills!

@Labraradabrador that's a good way to think about it actually.

Yes he's brilliant but I solo parent all the time because he's always doing something to the house so swings and roundabouts 🤣

Do it op, inflation and time, you will reap more enjoyment and you have a builder on side!

It's no different IMO than increasing your mortgage to move up the property ladder. We've released equity over the years to fund extension, new kitchen and garden office. All have added value and the house itself has gone up too. We're now at a mortgage of £250k against a property worth £500k. And that's with us releasing additional funds for school fees as well. It's secured debt against an asset which is different to unsecured debt.