Brian Rubins

Are home extensions an opportunity for brokers?

Home extensions are financing opportunities for brokers, according to Brian Rubins, director of Alternative Bridging Corporation.

Brian felt home extensions also saved homeowners from considerable and unrecoverable expenses. 

“Although the sales market has become lethargic, there is a shortage of available stock and a dearth of new houses being constructed. 

“Secondly, because of this shortage – except in prime central London – it still mainly remains a ‘sellers’ market’. 

“Add to this, moving schools and the emotion and effort resulting from a move and there are three reasons to improve an existing home and to be a ‘remainer’.

“Another reason is totally financial with agents, legal fees, stamp duty and removal costs being costs for which there are no tangible benefits – so it is easy to see that a home extension could be better value.”

Brian said that for these reasons, builders were busy adding rooms over garages, undertaking loft extensions and digging out basements. 

He added that home improvements were big business, but questioned how they were paid for. 

Brian felt that one option was to top-up the existing home loan but, if the terms or pricing of the existing loan precludes this, refinancing or securing a second charge from another lender were viable options.

“However, often timing causes a problem. 

“Maybe the new loan is not available until the work is completed, then bridging finance can fill the gap. 

“This may involve repaying the existing mortgage or borrowing secured by second charge. 

“Depending on the equity in the property, the bridging loan can be advanced in full or released in tranches as work progresses and interest accrued, all repaid from the new loan.”

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