Help! So confused about options. Funding a large house extension.

[Laiste]

Try to keep it brief - DH and i are renting (totally debt free). We want to get out of renting, but property prices in this area are too high for us. DH is builder, but even do-er-uppers are out of our reach round here.

I'm an only child and my mum lives nearby. Alone in detached house, land around it. I own half the house. No mortgage. Mum's 80 and wants us all to move in with her rather than move away. She's starting to need care, so would suit all needs. House needs modernising though and a BIG extension for us to all live without killing each other happily together. Think extra sitting room, 2 more bedrooms, one more bathroom, extend kitchen ect. 100k ish.

DH can do the main build. DHs family can do electrics plus bit of plumbing.

We don't want mum to pay for any of it although she has a fair bit of savings. Should we be looking at personal loans or would a better option be to try to release some equity from the house? I'm SO confused. Can anyone advise?

You're unlikely to get an unsecured personal loan for that amount from normal sources. The max is usually around £25k.

If your DM has savings, logically that's the best way to pay for it, interest on a mortgage will cost more. You could always treat it as a loan and pay her back every month by standing order if it makes you feel better. You can find repayment calculators online if you want to add interest.

If you were to get a mortgage, it would probably have to be taken out by the owners of the house, ie you and your DM, unless you want to start transferring ownership to you and your DH. Your DM is unlikely to qualify for a standard mortgage due to her age. I don't know if you could take one out by yourself/with your DH, while the property is owned by you and your DM?

However, this has the makings of being complicated if your DM ever needs to go into a care home or have paid for care by other means (unless you plan to care for her yourself, although this may be difficult if she develops health problems with complex needs unless you are a qualified health care professional).

Also could there possibly be inheritence tax issues with the jointly owned house? I assume you expect to be her sole heir when the time comes? Might be worth talking to a financial advisor or solicitor before committing to anything.