Has anyone else ever grossly overspent on a building project????

[redsky]

Help I'm really panicing now. OUr major house renovation project has gone way over budget (from £200K estimate to nearer £250K and we had expected the bank to extend our mortgage to cover it. But today they've told us they won't. I feel sick, breathless, panicky, sweaty etc. This is our dream home and I really don't want to sell. We've got a flat we can sell to raise the £50 but not until the tenancy expires in a few months. The builder will take us to court in the meantime.
Any advice anyone??????? Surely we are not the only people ever to find ourselves in this situation - are we????

can't you extend the mortgage on the flat then if you have 50k equity in it?

Bridging loan?

borrow on credit cards at o% if you can until you can sell the flat.

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If the builder gave you a £200k estimate, surely it's at least partly his fault that it's now £250k?

Won't he wait if you work out a schedule of payments?

Dh's first thought was credit cards but that sounds very scary to me - we finally got them under control after years of debt on them.
We've already remortgaged the flat.
Bridging loan might be the way to go but could we get one if our bank has already turned us down re extending the mortgage. It sounds to me like our bank think we are a bad risk - that's what is so utterly scary.
HHHHHHEEEEEEELLLLLLPPPPPP!!!

Why has the bank turned you down ? Has the work been completed yet or is there more to do ?

What is your relationship like with your builder? If it's still ok I would suggest you have a word with him and tell him that as the budget has gone so far over you are going to have to sell your flat so he'll have to wait for his money. Is he at fault for the budget being way out? If so, he might knock something off. Yes he could sue you before you sell the flat but the court would almost certainly tell him to wait until you've sold the flat (and you'll probably have sold the flat by the time it gets to that stage anyway).

Whatever you do please please don't go near one of those second-charge-on-your-home type companies you see on tv. They are a nightmare and the interest rates are appalling. They also take your house off you as soon as you miss a payment.

Good luck.

is the house not valude at the amount you anticiptaed then ie is it costing more to do the renovation than the house value and you are in negativ eequity once you apy the builder?

Thanks MNers for these replies! I esp like your comment piglit that the court might tell the builder to wait for the flat to sell.
So far we have got on really well with the builder - he has done a fantastic job and we have paid him promptly at each stage - until now. I think it could all be about to change now however. We can't really blame the builder for the overspend because it was regularly reviewed throughout the project and we honestly thought (stupidly it turns out) the bank would cover the extra.
The house has been valued at more than the cost of the renovations - and way more than we expected - which is another reason why we thought the bank would cover us. GGGGRRRR!

Don't forget that banks have to look at affordability criteria of repayments and stuff and also how much that particular branch has lent that month etc. Would you think about going to another bank and remortgaging your house? You might get a better deal with your interest rate and get the extra money you need.

Then you pay the builder and stick two fingers up at your current bank....

Its really easy to overspend..you just say "can you do this...instead of this" or "could I add" I think EVERYONE overspends to some extent.

But ultimately Im assuming your builder has paid for materials and has bills of his own to pay so pay him as much as you can as soon as possible and keep him up to date about when the rest will be forthcoming - if he knows you are intending to pay it may stop him from starting legal proceedings!

I imagine that 50k is a lot for a builder ..he may struggle if he's not paid and go under himself

I don't think that the OP has even suggested not paying the builder. Well, that's the way I read it anyway.

I know she isn't but he may have big problems waiting more than a couple of weeks, as it will effect his cash flow ..the same problem the op herself has in fact

Ah, I see what you are saying. I think the remortgage idea might be the quickest way to realise the extra funds. I managed to remortgage my old house from start to finish in just 5 days. I think it was a fluke though - they turned out to be pretty slow the rest of the time!

this time of year I doubt you'd get it done before the middle of January or later tbh

could try opening a couple if internet accounts and getting loans on them plus credit cards, family, sell a car or an antique

Agreed. As long as the interest rates aren't too high.

At the very least I would try to pay him for materials and any employees labour or you could put him out of business.