Mortgage query for an extension

Akabusi

Hi all, some background first.

We are a married couple with 4 kids who have both just turned 40. Mortgage we have is a 0.75% tracker with 100k left on it - costs approx 670 per month. The house is small for our growing family (kids sharing rooms and small living areas) so we decided we'd like an extension.

We have recently bought an adjoining piece of land that came up for sale using our savings. We now have the extra space to build such an extension. Planning shouldn't be an issue as any extension will be to the back of the property. Before we get plans done or talk to a broker, bank etc. I'd like to see what are our viable options.

Apart from the current mortgage our financial situation is as follows:

Combined income is 210K, one private sector, one public sector. We also have shares through a company share scheme worth 20K currently, these are locked for 3 years but there will be similar amounts of shares added each year to the portfolio.

I have not had the house valued but some backgound on it - was bought in 2006 pretty much at the height of the celtic tiger for 210K, it has had alot of work done on it since, so my hope is that it would be worth now at least what I paid for it. There is also the extra land now.

There are two car loans costing 900 per month, one will be paid off next year, the other in 2 years. There also is another loan costing 600 per month which also has 3 years left on it - the plan was to use the savings to pay this off early but the land came up for sale and we used it for that.

Whilst doing the extension, we'd also upgrade the heating system and re- slate the roof which needs doing.

Would a bank entertain us for a new mortgage now using the equity in the house or would we need to have the loans out of the way first? We will likely need to borrow another 350K (basing this on a 100 sq metre extension, replacing roof and upgrading heating from oil to geothermal) on top of the 100K we owe on the existing mortgage.

Going on 3.5 times our earnings, theoretically we could borrow up to 700K and if the equity we have in the house could be used we'd also have the 20% deposit. Is it as simple as that?

Sorry for the long post but wanted to give the full context.

walterking

At 210k income you will be fine especially as it will enhance the value.

They won't be overly concerned about the other loans, but I'd pay off the shorter one asap so that just two remain

Your current bank will be the best option and don't give up that tracker

Akabusi

Thanks you.

Okay, so leave the current tracker mortgage as is and take out a new mortgage for the extension and renovation. Didn't think that would be possible.

We'll work on paying of that loan, we can also be working on plans and then go for planning before formally applying in the new year.

walterking

https://www.boards.ie/discussion/comment/119467691#Comment_119467691

Banks call them "top-up" loans, but that's just a name. They are always separate loan agreements.

So you are just looking for a top up loan to build an extension.

Do not let them consolidate the tracker into a single new mortgage with a higher rate.