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How would you do this renovation / finance question

  • 04-06-2022 9:23am
    Registered Users Posts: 1 renoone

    First up, long time lurker, first time poster. Anyway, thanks for reading this one

    So, I've been fortunate enough to inherit a house. It's got electricity, running water etc. It's not in bad shape, but it's a good opportunity to do a major renovation on it, gut the insides, extend parts of it etc.

    Currently starting the process of plans of what we want, looking at builders etc

    Now this is where I'm getting stumped a bit. Currently, we're lucky enough after 16 years of paying it off, we have 100k left on our mortgage. Same house up the road is going for 400k, so we'd in theory, right now we "could" walk away with 300k after clearing the mortgage if we sold and all went a perfect word :)

    What I want to do is apply for a second mortgage right now to fund the renovation and stay living where we are while reno is being done, once that's nearly complete, sell what we have, and then clear the both the mortgages (existing and the 2nd one of the renovation) and move into the new place

    Firstly, and I know all the above depends on property prices etc. but does that make sense? Or am I completely out of my mind

    And then secondly, the 2nd mortgage, and this is where it's all falling down for me. Has anyone being in a similar situation? I'm reading different things about renovation mortgages and I'm struggling to understand how this would work. I'm presuming it's not as easy to outline the above to a bank / lender and they'll go fine, here's 250k.

    Would greatly appreciate any opinions / advice on this or even suggestions on another way to do this.