Mortgage and Renovation question

[mynamechangemyrules]

Hi all, I have no other adult to ask and am undecided as to what to do. I’m a bit overwhelmed to be honest as I have a lot of other stuff going on in my life but need to make this decision pronto.

I need another bedroom (I don’t have one, kids do).
I have intended to have a loft conversion but as I have limited earning power, I assumed it would be some way off.

After getting a good remortgage offer, I asked about whether equity release was possible, and it is, to a limited extent.

My mortgage is currently £1900 per month. I could remortgage and pay £1600 for 2 years. I could remortgage and release £53000 and pay £2000 per month for 5 years. Or mid range is paying £1950 for 3 years and getting £27k released.

If I don’t release the cash I won’t be able to do the loft until the next remortgage earliest.

If I do release £53k I can get the main building work done but only bare bones. I have done the rest of my house so could work through the 2nd fix myself and with my trade friends.

If I remortgage and pay the £1600 I will not be able to neatly save the £300 a month to be honest. I’d likely just be less frugal than I’ve had to be.

(and yes all these amounts are a ridiculous proportion of my salary but as I keep pointing out to people- all of those figures are cheaper than renting a 3 bed where I live so I stand by my decision to buy!)

What to do?!

Can your kids share a room? If they can then they should do so for sure.

I think personally I’d sleep better on a sofa bed in the living room than paying such a high mortgage!

Whats your take home pay? Just because it’ll be cheaper than rent doesn’t meant it’s affordable. If you can’t easily save that extra £300 a month then really this is a massive risk. I would look to move somewhere cheaper where you can afford a 3 bed or I would stay with your current set up and treat myself to a really comfy sofa bed instead and some blackout blinds in the living room or whatever you need to make it more comfortable. Sorry that’s probably not the response you were hoping for.

No, I think that’s fair enough. That’s one option after all.

The underlying issue (which plays heavy on my mind) is that my ExH owes £50k in unpaid child maintenance, continues to pay maximum 40% of what he is court ordered to do, when and if he wants to, and no legal channel seems to encourage him to pay anything! Eg this month he felt that the kids hadn’t been keen enough about seeing him so he paid 30%. If he paid on time and what he should, life would be breezy. (For context his salary is slightly more than 5x mine so he pays only 12% of his salary to the children when he pays the full amount)

The most expensive mortgage is 46% of my take home. The problem being I’ve been running on a deficit to get the house up and running, but this month I officially have no credit cards or other debts so going forward it should be simpler. I know that over the next 2 years the extra saved will simply balance the ship though, unless someone can get my exH to pay what he should. If they can the most expensive mortgage would become 35% of my monthly income.

What rooms do you currently have in your house? Could you repurpose a dining room to be a bedroom for you? How old / what sex are your DC?

We did a loft conversion in 2022 and it made a lovely addition to the house, but by the time everything was done, it did costs probably nearly £100k (London).

If you are feeling like the top costs might be tight financially, then maybe MN could suggest something more creative and less costly for you. Or doing a 2yr fix now, saving hard for a couple of years and reevaluating the loft plan on your next remortgage?

What a shame your ExH is such a prick, sorry he’s like that. Unfortunately that means though that you can’t rely on that as an income and I really wouldn’t base a mortgage off that. It sounds like such a tough spot to be in. I would make do (or make better somehow) with what I had or move to somewhere cheaper in your shoes. As PP said building works are expensive and even if you’ve been given a quote there’s things that can crop up midway through too that add up.

If you had savings or lots of spare money per month it would be different but it sounds like you are already cutting back and this would make things worse for you financially. I hope you find a solution xx

OP I feel for you with your mean exh not paying maintenance as he should. I think CMS should do more to get this money paid to you. I had a loft conversion 12 years ago and at the time it cost £48k for building work then I had to pay more money for carpets. I had 2 large additional bedrooms with full windows at one end and velux at other end of room and a shower room added, but I know building costs have gone through the roof. It would be more than double that now. Im in the Midlands so not as high as London building costs. In your position I'd go for the £1600 mortgage fixed for 2 years. I think we will go into recession and then mortgage rates go down so I'd wait until then to release any equity. In the meantime I'd buy a really good quality sofa bed for lounge, as PP suggested black out blinds. You'll feel better knowing the amount you owe on your home hasn't gone up and with more equity in your home you'll get a cheaper mortgage rate. If you max out by releasing so much equity you'll be hit with a higher interest rates. I know it feels like you can't win.