Extending the mortgage for home improvement

[teaandbiscuitsforme]

Just looking for any advice about our options for raising some money for home improvements!

When we bought our house in 2013: 1 civil servant (£50k salary) and 1 full time teacher (£30k), no children. Bought for £268k, mortgage of £240k.

Current situation: 1 civil servant (52k), 1 SAHM with 2 young children. House is worth about £330-350k (based on current market) and our mortgage is down to £210k. Repayments are easy to make (£1050 a month) and we have no other debt. We also have a BTL which pays for itself.

So the current problem- we want to extend our house rather than move. We've got planning but quotes are coming in far higher than we expected so we're looking at almost £200k. We have £150k of savings but would need to extend the mortgage in order to raise the final £50k - would they even consider it given my current employment position?

I'm intending on doing supply from next spring with a view to having a part time position for September. But we will then also have childcare costs for 2 of about £800 a month, although my DD's 15 hours will kick in next September.

I think with the extension, our house could sell for £450k (so mortgage would be about £260-270k) but we wouldn't make all the money back for a while yet. We wouldn't need to move until after the DC finish school but obviously we're concerned about Brexit and a huge property crash!

So is it worth ringing our mortgage provider, or in the current climate, would it just be a no?

We just did this, our work starts in a couple of weeks. I can't comment on your financial position as I really don't know about how affordability checks go at the moment. But you can check on comparison websites, they often have a calculator for that. We think we might just about end up with a house worth what we've paid when we add on the money to do the work (also came in much higher than we initially thought) but as it's a long term house to live in rather than to make money, that's fine for us. It can't hurt to give the bank a call. Lots of people are remortgaging to do long term fixed rates now I believe, as interest rates are thought to be due an increase, so a remortgage might be worth it anyway. (disclaimer, I know very little about economics so don't just take my word for it!)

Thanks Sad, just not sure they'll let us as we're on one salary at the moment!

Have a look at the mortgage comparison websites. You put your salary in and they give you an estimate of what you might be able to get. It's crude, but might give you an idea. And it can't hurt to give your bank a call to find out. Good luck x

I don't think think you will be able to borrow that much on income of £52k and 2 dependants. Worth a call but unlikely.

Thanks, I've done the mortgage calculator and they've said up to £265k on my DH's salary so maybe we can almost get there.

Didn't expect a garage with a bedroom & ensuite above to cost over £200k!!

Tea that sounds like a crazy amount for a garage with bedroom above! I hope to God our kitchen dining extension with new hall and utility and bedroom ensuite including existing bathroom redesign doesn't come close to that amount!

Are you absolutely sure what you to take a hit of £80-100k on cost v value?

...that you want to...^

I think you may struggle with the bank. We did an additional mortgage last year for a loft conversion and it was as stringent as a new application. They also stress test numbers so regardless of what you can afford now they factor in an increase of 'x'% so see that if it is still affordable. I also don't get the numbers adding up though - why don't you just move? It doesn't seem like you would get much of cost back?

Why are your extension costs so high?
I know it's got more expensive recently due to various factors but that seems an awful lot for what you are describing on what seems to be a fairly normal house (based on costs)

Quotes sound way too high. Also, why are you contemplating spending £200k on a house valued at £300/350 which will only increase in value by maybe £100k?

Don't remortgage to pay for those quotes. There's something not right there unless you have a serious issue with your footings or similar to the extent that it really wouldn't be economically viable to extend.

We did extend our mortgage to do the same but based it on only one income as mine is erratic as I'm part time self employed and it complicated things. We also had a bigger value to borrow ratio.
Even though we extended the mortgage our monthly payments went down as we managed to get a better interest rate.

How many quotes have you had?

You should really have between 3-5?

You could build a whole house for that I think

That sounds very high. We spent €200k in 2015 on refurbishing a whole four bed semi totally (new bathroom kitchen windows rewiring heating etc), plus converting garage, building above garage and an attic conversion.

How are £1,000 payments affordable on a £52 k salary?

I had to go back to work to get mortgage. They weren't bothered about childcare costs as much as two incomes.

I'm in Ireland though.

We recently paid £90k for 2 bedrooms and a garage.

OP you are being ripped off

That's a crazy amount to spent. Keep looking around for a better quote.

Nothing to do with the mortgage question but our neighbour had an extension done which was 7x4m single along the back of the house & a bedroom & bathroom above the garage. The existing garage was knocked down & built again as it was single brick. Their whole build including new kitchen, flooring, paint, new bathroom & utility downstairs & everything else was £130,000

My folks spent about that amount on their extension (a bit less actually) and they basically put on the equivalent of their whole house again: a huge lounge, a double garage, a big double ensuite bedroom with a large balcony, and another bedroom.

A family friend is converting their garage into a bedroom and extending behind.. bigger kitchen and bigger living room. This is around 40k.
It does sound expensive, just make sure you've got a lot of different quotes... as you could by a 5 bed detached house here for 260k!!!!

Wow, a lot of replies all of a sudden!!

We've had 6 quotes this year, all £145-160k excluding VAT. We had 7 quotes last year, they were cheaper at £130-150 excluding VAT but we were horrified at the prices so didn't proceed then. The price also includes a new roof (feature roof on a 1930s house. Approx £40k and has to be done whether we extend or not)

With the extension, our house would sell at the moment for £450k. We bought for £268k. With the extension, we would have no need to move. 2 good primaries and an outstanding infant within walking distance, 1 outstanding secondary and 1 good secondary 2 mins from where we are. We're in a very desirable part of our little town and prices (at the moment!) are rising fast!

We have £150k cash to spend but hoped it would come in at around £100k - £450k value with £200k mortgage sounded pretty good to us!

We could move but would have to spend at least £60k on our house to sell (new roof being major cost!). Then there is nothing to buy at the moment without going to a much less desirable area, further away from all the schools and amenities we have here.

I agree that £200k is ridiculous for a 2 storey extension but we're a bit stuck about how to proceed at the moment. All the options come back to the fact that our current house extended is better than anything else available at the moment.

As for getting ourselves into negative equity - we're nowhere near that situation. This is our most expensive period and the time that I'm earning the least. Within a year, we'll have 2 salaries and less childcare costs. If things got really bad, we could sell our second property. Anyway, it's just not a concern. We can easily afford the mortgage repayments.

The numbers here seem a bit odd to me. I'm not sure how you accrue savings of £150k and a second property on those incomes or why you'd spend £200k on improvements to a house when it won't add anything like that to the value.

I'm guessing there must be other factors here which is why no one can really advise what your chances of getting a mortgage now are- only a broker/ lender can really tell you when they see the full financial picture.

The £150k is inheritance. We both had properties when we met, sold mine and added savings to buy our current property, kept DH's as an investment.

We wouldn't be spending £200k to add value. We'd be doing it to create our family home. That doesn't mean it sits well with me either.

But my question was really about extending the mortgage when we're only on one salary for the short term. The answer is probably no so thank you for any input.

We're still in as much of a mess!