NovaGTE2
Member
Registered: 26th Sep 06
Location: Peasedown St John, Bristol Avon
User status: Offline
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Since I bought my current place nearly 2 years ago I have always planned on putting and extension out the back; we have a large'ish south facing garden and planning on putting a second lounge on the back and then knocking the kitchen and dinning room through so those three rooms are a nice big open plan space with the other lounge being made more snug.
Wasn’t planning on doing this for some time but thinking actually may aswell go on and do it and no plans to move now as cant warrant the cost that it would be. So basically would be a single story, apex roof with nice big windows and maybe bi-folding doors. At the same time would fit a new kitchen as the one in there is terrible and is on the list of plans.
I think I could do all of this for around £20K; as would do as much as I can myself and then shop around for the rest. That’s £10K for the kitchen and £10K for the extension.
But how's best to pay for it is what I am thinking. I want to re-mortgage soon as im not on the best deal and now in the 75% LTV; the extension should take the value of the house from £250K to around the £275K but if I re-mortgage and release the equity I wouldn’t be able to get as a good a rate as would have a greater LTV from what I understand? Would I be best to take out a temporary loan and maybe 0% finance on the kitchen etc and then once complete re-mortgage with the value of the house at £275K?
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Rob_Quads
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Registered: 29th Mar 01
Location: southampton
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Any re-mortgage would be done on the current house value not what it will be worth in the future.
If you can get 0% then its a possible route. Its once that has the risks because if you find you can't get the mortgage you want you will either be slammed for costs if the money is on the credit card or have to go for a lesser mortgage just to clear the card.
A long term loan for a chunk of it might be a better route where you pay it off early but by putting it over 3/4 years getting a better rate. (but this might affect your capability to get the new mortgage)
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AndyKent
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Registered: 3rd Sep 05
User status: Offline
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If you do the work in the hope the value of the upgraded house will be enough to get you a better rate then, as said, you leave yourself open to the risk of being stuck with expensive temporary loans if it doesn't work out.
Depends on your area, but round here property isn't moving and values are being cut slightly even if asking prices aren't changing too much.
Best option if you really want to add it to the mortgage would be to do:
Temp loan to complete the extension.
Attempt to re-mortgage.
If successful complete kitchen.
Its the floor space that will impact the value most, not a £10k kitchen.
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baza31
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Registered: 19th Apr 03
Location: yorkshire
User status: Offline
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10k for an extension? it must be a matchbox
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