[benzlife]

I'm currently looking at a house that is about £50k below our self-imposed budget of £300k (i.e.£250k) for which we have a 25% deposit saved.

It's a lot of house for it's money, but needs quite a bit of work doing to it to turn it into the family home we would like.

In short we think we'd need to add a second storey to an existing ground floor extension to add an extra bedroom. Other changes (such as new fixtures and fittings) can happen over a longer period when we've got the cash saved. However, we would like to try and add the extension pretty much as soon as we move in (taking into account planning etc).

In today's loan/mortgage market what are the options for financing something like this? Given that even on a smaller mortgage (i.e. £250k) we won't have cash left to fund this entirely from savings. Is it possible to obtain a mortgage for the house + extension? Would we be better off with a bridging loan? Where's the best place to start looking for these things?

Any other suggestions welcome.

DISCLAIMER: This house is being bought in full knowledge that a massive HPC may be round the corner. We don't want it to be our pension, nor do we plan to flip it to move on up the ladder, or rent it out to a family of immigrants on benefits. If sucessful we plan on living in it for many many years and raising our two wonderful children in it. Phew...

[Soton]

Most lenders will not be interested and once you have gone round the houses with specialist lenders you will figure out that it will be more hassle than its worth.
A commercial bank loan looks the best bet but this is again difficult for a householder .

[terryturbojr]

Why not get an 85% LTV mortgage? You'd obviously suffer on rate but would free up plenty for the extension.

[benzlife]

 terryturbojr, on 28 April 2012 - 09:32 PM, said:

Why not get an 85% LTV mortgage? You'd obviously suffer on rate but would free up plenty for the extension.

Interesting idea. Its probably worth checking to see how onerous the rate can be.

Would we be able to remortgage after the work has been completed (perhaps within 1 year of taking the original mortgage out) to perhaps get the house revalued and hopefully move onto a better LTV mortgage?

[tim123]

 benzlife, on 28 April 2012 - 06:31 PM, said:

I'm currently looking at a house that is about £50k below our self-imposed budget of £300k (i.e.£250k) for which we have a 25% deposit saved.

It's a lot of house for it's money, but needs quite a bit of work doing to it to turn it into the family home we would like.

In short we think we'd need to add a second storey to an existing ground floor extension to add an extra bedroom. Other changes (such as new fixtures and fittings) can happen over a longer period when we've got the cash saved. However, we would like to try and add the extension pretty much as soon as we move in (taking into account planning etc).

your biggest problem is building regs.

there is no guarantee that the foundations for a one storey extension are deep enough for two. If the aren't the BI won't let you build unless you knock down and start again.

(oh and you can't add a second storey if it's closer than 6 feet (or is it 2 metres) from the boundary.)

tim

[getknk]

would you need to get approval from lending bank for any rework you need to do?

i meant not just the planning commission but the banks which lend you money?

[tim123]

 getknk, on 03 May 2012 - 04:29 PM, said:

would you need to get approval from lending bank for any rework you need to do?

i meant not just the planning commission but the banks which lend you money?

not if you don't need then to fund it, you don't

tim

[Flick the Beeny]

As Tim mentioned, the foundations for the single storey are probably the most important thing to consider. Was the single storey extension done recently and are you able to contact the builder? Alternatively, if the build was done recently, you could contact the building inspections dept. of your council - although it might be difficult to get a response.

Without this, then the only alternative is to find out by digging an inspection trench / trenches and can be very costly.