Secured loan for loft conversion - bad idea??

[JudyGemstone]

I live in a terraced house in a desirable city with my partner my two teens split their time between us and their dad.

I bought the house 3 years ago with a ‘converted loft space’ which means I can’t call it a 3rd bedroom, it’s common around here and usually means it hasn’t been done to regs (under insulated etc).

My 17 year old son currently sleeps up there but what I’d really like to do is convert it fully, by adding a full dormer and shower room as 4 of us and one bathroom isn’t ideal!

My partner is not on the deeds/mortgage, I pay it on my own as I don’t want to potentially compromise my kids security in the event of a split (divorce can make you cautious like that!).

So I’ve applied to my mortgage provider to borrow the extra which they have declined to lend me. I can apply for a secured loan at 3.5% over the same term as the mortgage (26 years to go) which I would pay alongside, this would be affordable but the idea of a loan secured against the house makes me a bit nervous!

Figures are roughly: house worth £300k, mortgage currently £110k so there is decent equity and like I said, it’s a desirable area with a v hot property market. I would be borrowing an extra £45k or so.

Should I? Would you?
TIA

Have you had a chat to an estate agent to see how much value a properly done loft conversion and an extra bathroom will add to the property?

Do you know what's "wrong" with the current conversion that means it can't get regs?

We're buying a house at the moment that has the same - it can't get regs because the council requires it to have a clear access point to the ground floor, and it's on the third floor. We're waiting to see if there's a workaround. It's often a stairs issue, I believe.

I think whether you know that your dormer idea is both possible, and affordable for £45k, matters.

Then how much additional it would add to your house. Do houses with 3 beds sell near you for enough extra that it'd be worthwhile?

@Motherofcats007

Have you had a chat to an estate agent to see how much value a properly done loft conversion and an extra bathroom will add to the property?

That would be a good idea, I’ll call the agents I bought it from and see what they say.

I do believe it’s something to do with the insulation, the existing stairs are fine and can be kept but I think the existing door would need to be replaced with a fire door.

I think it’s ok as long as the second floor has a window you can get out of.

I did get a survey done at the time but it didn’t go into a lot of detail.

Do you need the extra bedroom in the property you’re buying or would it just be nice to have?

Definitely possible and affordable for £45k, have had several quotes and the neighbours both have full dormers.

Well the mortgage is a loan secured against the house so I dont think you should worry about that. Is there a reason you cant extend the mortgage? Is it because the mortgage is fixed at a lower rate and they want to lend the extra at a higher rate?

How much would the monthly repayments be and can you afford it (do a proper budget). Subject to that it sounds like it would improve your quality of life no end and from what you’ve said I think you’d get the money back so I would go for it.

I think it’s mainly because I’m a lone parent, they won’t lend me enough to do it on one income even though I can afford it. My partner pays towards utilities and buys most of the food but I can’t really count that towards income.

Have spoken to the agent and she reckons with the market now it would go on for £320k with a view to getting £340-£350k as is, with loft conversions they go for £370-420k.