Hope someone can clarify for me.

We are buying a bungalow outright with no requirement for a mortgage. We are then looking to fund adding a floor/extension via a mortgage. As we will have no mortgage is it possible to get a re-mortgage for this?

I’m feeling we may have made a mistake in not applying for the mortgage for the sale and keeping our own money as I can’t determine now whether we’ll be able to get a totally new mortgage for this work.

Our LTV will only be about 35%.


  • Adam


    I don’t see why you wouldn’t be able to raise a small mortgage against your home to do this work. The fact that you will have an asset that is wholly owned by you works very much in your favour in this instance. By requesting a mortgage of roughly 1/3 LTV you will be viewed as "low risk" by many lenders and there should be plenty of competitively priced options available to you.

    My own situation is a parody of high vs low risk individuals and how it can affect your chances of getting a mortgage;

    At the worst of the financial crisis in 2009 I needed funds to finish a self build (I bought the house we knocked down in May 2007; about 4 months before everything went t*ts up) I was shown the door by every single bank and lender I approached because I was young (25), self employed and had no real credit history. Silly me for thinking that if I spend within my limits and didn’t ever need credit or a loan it would count against me later in life!

    I turned to my father who was in on the project with me already. Being the prudent fellow he is he had an excellent credit score (30 yrs of paying mortgage off, various loans etc that having 3 kids sometimes entails) The banks, even in 2009 were falling over themselves to lend him money because he was low risk. He owned his home and he had a well paid job. We got a tracker mortgage offer of BOE base rate + 0.2% giving us an effective mortgage rate of 0.7%.

    Even now the base rate is still 0.5%. We borrowed every penny they were prepared to give us and set about using it. The interest from the account covered the interest on the mortgage and then some. It was free money. We are still using it to renovate our own places and sell them on.

    I dare say you’ll be in the same position although you might not get as lucky as we did with your rates.

    It sounds like a fantastic project. The very best of luck to you!

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