How do you fund an extension

[LeslieKnope2020]

We're just about to buy our first house but the few we've shortlisted are quite small and would benefit from a small extension to the kitchen. The only lumpsum we have is for the deposit and it would take a good few years to save up 20-30k for the extension so how would we do it? How have you funded yours if you didn't have the money available right away?

We remortgaged our house. I'm not sure how that works as a first time buyer though. We did live in ours for two years first so sometimes having some time to save up is going to have to be factored in.

We bought a house under budget so was able to set aside a proportion of our deposit to use on an extension. Five years later we remortgaged in order to fund a few more home improvements (new windows, doors, porch)

Out of savings. As above, some people re-mortgage if they’ve built up a substantial equity in the house first.

You could also take out a personal loan but I think that it just doesn’t seem affordable at this point in time and you need to build up savings first.

Mix of savings and remortgaging as our house value went up.

We'd saved £40k and borrowed the rest - mortgage, credit cards and bank of mum and dad.

Overpayed the mortgage for a good few years to pay off as much as we could then re mortgaged. We are getting the work done now but have had the house for a good 10 years getting to the position where we could comfortably do the work. Unless you come in to money somehow or earn substantially more there isn't a quick way.

We waited until we did have the money.

Living in the house for a few years first actually changed our ideas about what we wanted from the extension anyway, since we had a better idea of how our family used the house.

Living in the house for a few years first actually changed our ideas about what we wanted from the extension anyway, since we had a better idea of how our family used the house.

I completely agree with this. What we wanted to initially do we haven't done at all and the result is much better for it. It took us an age to decide on plans and find builders (plural cos the first one scarpered) so that helped on the money front too.

We didn't stretch ourselves in terms of our borrowing when we bought the house, so our LTV % was quite low. Then we lived in the house for 4 years and each time our mortgage came up for renewal we released what we could and put it in high interest ISAs. We started the work last November, in the knowledge that we were remortgaging again in Jan which would release the final balance of the build costs. Over the years we have also been saving what we could and even during the build have put money towards the costs every month on top.

Savings.

I live in a house that could do with an extension. Unless I inherit a load of money we probably won't get the extension done. I love planning what I'd do though! Just can't afford it.

I will pay for it from my inheritance. This is enough to make myself "mortgage neutral" with the remaining mortgage in the offset account and the rest should be enough to pay for the planned extension.
I know I'm lucky in this respect as it means I've paid less than three years of interest on my house. Less lucky though that an inheritance means loosing part of your family forever :-(

Some savings and remortgaging.

high interest ISA? Where do I get one of those?

We saved before buying our current home then took out a personal loan to top up what of had to do some essential improvements within the first year.

We then overpaid our mortgage so that 3 years later we had some equity to release when we remortgaged. Not enough for an extension but a big structural project.

No easy solution I'm afraid. Be careful and get opinions from estate agents if you plan to borrow money to improve. You either have to be sure you're going to live there a while, or that you'll recoup the money by improving the value by the work you do. A small kitchen extension may not do this.