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Loan options for House Extension

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  • 09-02-2010 3:49pm
    #1
    Plates
    Registered Users Posts: 925 ✭✭✭


    Hi all,

    As we are in slight negative equity on our house - we obviously can't get a top up on our mortgage for an extension we would like to build. Our mortgage is the only debt we have (no credit card or other personal loan debt).

    What are our other options? Personal loans seem to be limited both in the amount you can borrow and the term allowed. We'd be looking to borrow about 60k over 10-15 years.

    Any advice would be appreciated.


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    #2
    jimoc
    Registered Users Posts: 634 ✭✭✭jimoc


    Firstly you would have to consider if taking out this much money will take you over 40% of your net monthly income in total repayments including your mortgage.
    Banks are very reluctant to loan if it would mean that more then 30% of your income goes to paying back loans now.
    If you have a large amount of savings and are on good terms with them a Credit Union might consider it, but it would mean that your savings would be locked in until the loan is repayed as your savings would be the security.

    It might be worth talking to your mortgage company, as spending this much on an extension will add significant value to a house, which might take you out of negative equity on it.

    However, it might be worth considering if the extension is a 'nice-to-have' or if you really and truly need it.


  • Options
    #3
    Plates
    Registered Users Posts: 925 ✭✭✭Plates


    Thanks for the advice jimoc. We're not at 30% with our mortgage so hopefully we'll be looked upon favourably.
    jimoc wrote: »
    However, it might be worth considering if the extension is a 'nice-to-have' or if you really and truly need it.

    Aren't extensions usually "nice to haves"? Unless you're trying to cram a family of 10 into a 3 bed house? And if you're going to have a "nice to have" extension - isn't the best time to get it when lending rates are at an all time low and builders are slashing their prices? :D


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