Hi Guys I need some advice regarding building an extension. We are fast outgrowing our home but love the street/area. Where do I start with an extension? Has anyone here had one built? Do you have to have plans to prove that your house will be worth what they are lending you?
It depends on the equity in your house. If the amount you want to borrow takes your total borrowing above the current (mortgage) value, then you may need to provide estimates of what it will be worth once finished.
Example 1 ) House value £200,000. Mortgage £180,000. LTV 90% Finance need £30,000. A re-valuation for what it will be worth would be required.
Example 2 ) House value £200,000 Mortgage £100,000 LTV 50% Finance need £30,000
Plenty of equity, so no need for an estimated future value.
AND then you have to worry about income multiples! And planning permission etc etc etc
Originally posted by stateofplay: It depends on the equity in your house. If the amount you want to borrow takes your total borrowing above the current (mortgage) value, then you may need to provide estimates of what it will be worth once finished.
Example 1 ) House value £200,000. Mortgage £180,000. LTV 90% Finance need £30,000. A re-valuation for what it will be worth would be required.
Example 2 ) House value £200,000 Mortgage £100,000 LTV 50% Finance need £30,000
Plenty of equity, so no need for an estimated future value.
AND then you have to worry about income multiples! And planning permission etc etc etc
Well our property is currently valued at £86,000 and our mortgage is £60,000 but we also currently have a loan of £5,000 secured on the property. I don't know if I am asking to much but I wondered if anyone could break down the whole process for me from personal experiance or otherwise.
Most lenders will go up to 95% LTV. That will give you £16000, without the need for an estimated future value.
Income multiple is how mortgage companies work out how much they can lend you. Typically, 3.5 x sole income, and 2.5 x joint. Although a lot of lenders will go higher than this nowadays. The more likely is 3 x joint, 4 x sole.
What you need is a quote. You need a builder to tell you how much it will cost. Once you have a ball park figure, you can then make a decision.
We have had two extensions built and are currently doing a third one (different house!). What kind of extension are you thinking of - ground floor, loft?
For the first one we needed a loan from the lender, who sent a surveyor to do a re-valuation. He said "it won't increase the value of the house" (it was a small kitchen extension). We said "we know, that isn't why we are doing it", and we got the loan, I think it was £10K, hard to remember as this was ten years ago. We had around £40K equity in the property though.
You may not need Planning Permission, you may be able to get it done under Permitted Development. Either way you will need Building Control (different department at the council). My builder dealt with that. My partner (a good amateur) drew the plans for two simpler extensions, but if it is more complex you will need someone to draw them, an architectural technician will do that for you.
Good builders get booked up early so be prepared to wait - we booked ours about six months before we wanted him to start. As Mr Play says, your first challenge is to find a good builder and find out how much it's going to cost.
Also, unless your property is detached, I'd recommend an architect who also deals with party wall issues as this can save you a lot of bother in the long run, esp if you're not sure how your neighbours will react to your extension.
Originally posted by jray: Also, unless your property is detached, I'd recommend an architect who also deals with party wall issues as this can save you a lot of bother in the long run, esp if you're not sure how your neighbours will react to your extension.
Thanks guys in answear to the question 'What type of extension' we are thinking of a ground floor extension the length of the back of our house. My Neighbour has a conservatory the length of the back, I don't know if this stands us in good stead with regards to planning permission or not. xx
I think the fact that your neighbour already has a similar extension stands you in good stead.
It sets a precedent and he's not going to obeject if you do the same, is he? Might be worth asking his advice on who he used to build it, any pitfalls he encountered or tips he could give you...
He'll probably be flattered you asked and go out of his way to help you...
