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Increasing your mortgage to cover the cost of a conversion should be very simple (especially with your estimated LTV). The issue is the length of time you'll be paying it off... Interest accumulation might even double the cost over the life of the term.
If you're going ahead you should definitely remortgage after the work for the reasons stated in your own post.
Then, you have two options for financing:
- Pay for conversion from savings
- Increase mortgage and then pay off some / not all of that increase with your savings
The first is the simplest but the second would leave you some of your savings whilst directly reducing your capital mortgage amount (leading to less interest etc).
- Pay for conversion from savings
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It all depends what are the savings for.
You will pay more to finance a mortgage than you will earn on any savings - so from a purely financial viewpoint, paying for an extension from savings & leaving the mortgage alone is the cheapest thing to do.
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Don't have any advice re. financing but am interested cos it's something I might consider in the future. It's a couple of years since I bought a first floor flat (on Seymour) and my solicitor specifically mentioned that roof costs were my responsibility. She reckoned that was unusual, maybe it's a ladder thing?
Are you leasehold or share of freehold?
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Soul
NotThamesWater
Brun
@aggi
Just looking to get some thoughts on possibilities.
I bought a flat (top half of a Victorian terrace) 6 years ago.
My mortgage is up for renewal
Flat value has increased significantly so LTV will be decent in terms of getting a new deal (lower than 50% I reckon).
Some work needs doing to the roof of the house. I believe, although I haven't checked the terms recently, that I'm solely responsible for costs of the roof.
I'm thinking that as it looks like I'll have scaffolding up, etc that it may be worth a loft conversion.
Loft conversion will probably add another 30% or so to the flat's square footage.
What I'm pondering is mortgage/financing.
Get a new mortgage now, pay for the loft conversion from savings.
Pay for the loft conversion from savings, get a new mortgage after (I imagine better rates as increased LTV)
Increase the mortgage to fund the loft conversion.
Paying from savings is probably manageable but will be a little tight.
How amenable are lenders to increase mortgages for things like loft conversions?
Any thoughts?