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Additional Lending for Home Renovations

  • 06-09-2019 12:35pm
    #1
    gucci
    Registered Users, Registered Users 2 Posts: 4,289 ✭✭✭


    We currently are in a fixed rate mortgage (2 years to go) at 1.9% APR.

    We have 85% LTV based on a value of the house that is probably a fraction low, it could be more like 80% LTV as the house prices locally are gone up.

    We paid 210k, houses are generally 240k now 3 years later.

    We are interested in an attic conversion, which would be in the region of 30/40k. Houses that have this done on our street have significant additional value (closer to the 280 mark) and it also would mean we could live here for another 5 years as opposed to maybe making a move to a 3 bed, and then possibly relocating again in 5 years when we have a bit more capital.

    In our minds it makes sense. We would end up with a similar about of LTV (our full actual loan in money terms would be in the region of 220,00 which would be 80% of 280,000) so we should be able to still get a good deal, obviously with a higher mortgage repayment per month.

    Can anyone offer advice on how best to approach this additional loan structure? Our current lender can offer a loan at 2.75% APR with the length of term negociable up to the actual same length as my current mortgage (30 years)

    Has anyone done this, or could they offer a link for further reading and considerations?


Comments

  • #2
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    I think your cheapest option would be through your existing lender once you're inside their loan to value and loan to income criteria.

    If you are doing structural work you will have to apply for planning permission and have the works supervised and costed by a Qualified Architect or Engineer.

    Its important that the work is completed with planning permission and building regulations as if it's not you will problems when selling again.


  • #3
    gucci
    Registered Users, Registered Users 2 Posts: 4,289 ✭✭✭gucci


    Thank you for the advice Trish, I am based in the UK and as far as I know to do what I plan does not require Planning Permission, but would require to be built to regulations and have proper sign off to be classed as an actual "room"

    Has anyone experience of doing this type of thing? The plan would be obviously to consolidate that renovations loan and mortgage loan the next time my mortgage comes up for renewal.


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