Financing an extension

[Homerenonovice]

We’ve been planning an extension for almost two years now to coincide with our mortgage renewal, but speaking to the mortgage advisor recently we’ve realised we can’t borrow half as much as we thought we’d be able to. We’re about £100k short.

We were planning a double extension at the side and rear but ultimately we need to do the extension bit by bit to add the value to the house in order to borrow more to do the next bit.

My DH thinks we’ll end up spending more that way so we should do everything we can to get the structure of the entire extension we want built but without actually knocking the existing house through. Then as we complete the house section by section we’ll be able to borrow more money to do the next.

Whilst I understand DH’s point that it’ll more expensive getting builders to keep re-attending for different phases, I really don’t like the idea of part built extensions because I can just see us running out of money and being stuck on a building site.

Does anyone have any thoughts on my DH’s suggestion or how would you tackle it?

I don't think a part built extension will add the value you'd need to borrow against for the next stage.

This all sounds quite close to the wire. Don't skimp on contingency in your budget.

how much are you expecting the extension to cost? Can you not do the shell of it and then add a cheaper kitchen or a temp kitchen etc? I'm not really understanding what the part extension might be?

Very much sounds like you can't afford the extension.

Don't start it if you are unsure about how /when you'll finish it!

You could do the side or rear extension first and finish it with the view to do the other part at a later time when mortgage willallow it. At least this way, you'll have use of the new building without running out of money.

You will end up spending more doing it bit by bit, but I also can't see the bank lending you more money with a part-built extension. There is some technical aspect to what you need to have in a kitchen in order for a bank to agree to value it (hot and cold tap, for one), but I don't think meeting that criteria with the rest being a shambles is going to help you release more money.

Yes a part built extension may actually lower the value of the house.

We remortgaged to finance a double storey extension at the rear, completed It. Then 3 years later, remortgaged to finance a single storey extension. It has undoubtedly cost us more but we couldn't afford it all in one go so it was either do it in stages, but completing each stage properly, or waiting until we could afford it all (which, for various reasons, wasn't an option).

Depends. Hard to know to be honest. Is it that you can't afford to borrow the money or that you haven't enough equity in the house? You might be able to bridge some of the finance pending completion of the works and then remortgage. You need to speak to a specialist broker.