Unable to increase mortgage

[Neuken]

Hi

Friend of mine is in the process of building a house which requires him to increase the mortgage to finish. However he has been refused the increase by his bank and I believe he has tried 1 or 2 other banks but same story.

He has in the last year started his own business(building industry) so initially his earnings are not signifiicant particularly with the downturn.

Right now he owes money to various people who have worked on the house so he is heading for problems if he cannot pay.

One favourable point, the house he has built will be worth considerably more than the current mortgage on it, the site was left to him therefore the cost has only been for the building of the house.

What possibilities does he have with regard to getting the finances without being charged exorbitant rates of interest?

Any suggestions would be appreciated.

Thanks
Neuken

 

[Senna]

depending on the amount needed, he could get a home improvement loan or personal loan. Banks just dont want to give mortgages especialy if the person is self employed.

If there is alot of money owed, it might be the best option to sell the house, as you said the amount of the mortgage is less than the value, so they could pay off all loans and still come out with money. A neighbour of mind was in a similar situation, lost his job just as the house was being finished, he sold up, paid off all loans and bought a smaller house.