Informing Mortgage Lender of new build in garden

[Deejay_2]

Hi

We are currently in pre planning consultation.  If we decide to go ahead we hope to stay in our current property whilst the main dwelling is built in the garden.  We would then move into the new, probably very unfinished house, demolish the existing property and build the triple garage with granny flat above, which will attach to the main house via a link (not integrated into new house).  I have spoken to Building Control who, from their point of view, have said they are OK to split this into two applications.  We currently have a relatively small mortgage on the existing property but it would be helpful (probably essential) to keep this in place if possible.  If we have to pay this off, it would seriously dent our ability to proceed with the new build.  Does anyone know whether we need to inform the mortgage lender as we are not demolishing our current home until the main new build house is up and running.  The mortgage would remain with the new property ie same address etc but more valuable property we would hope.   My feeling is we should inform the lender but just wondered if anyone else has a different slant on this.

[markc]

As long as you are not devaluing the property, i.e demolishing before starting new build then i cannot see any problem

[recoveringbuilder]

Can’t see you needing to tell them until you are going to demolish the old property but I don’t think they’ll just swap the mortgage onto the new one, you’ll probably have to apply again so that they can do all the legal stuff with title deeds etc on the new house.

[Deejay_2]

Thank you for your response.  I was thinking we could demolish the current property once living in the new build house and then build the garage and granny flat and then inform the mortgage lender. and re-do the title deed at that time.  (I must admit I hadn't thought of having to redo the title deed but the footprint of the house and garage will be different which I presume will be required to be shown on the title plan.   Do you, or anyone else, think that timeline would be possible.

[Deejay_2]

The mention of the title deeds was useful as it encouraged me to look into it. From what I can gather, I don't think the title plan or deeds will have to be changed because of the new build, as we are not altering any boundaries.  So we can probably build the main house and move in, demolish the current property and build new triple garage with granny flat in its place, and then inform mortgage lender (or not, as the mortgage is for the same address for a house that will be worth much more). If we can  keep the relatively small existing mortgage whilst the build is completed then this would be a great help to us.  If I inform them of our intentions before any work is started, then I am sure we shall have to re-mortgage in some way or other, and we are not in a good position to do this.  

[Temp]

In my limited experience you need their permission not just notification. I would ask for a copy of the T&Cs.

[Temp]

I recall a post here years ago from someone that had started a knock down and rebuild. About three quarters of the way through they ran out of cash and needed to borrow more to finish the project. That caused a problem because they hadn't told their mortgage co and that lender didn't lend on building projects. 

[Deejay_2]

Thank you - I will check the terms and conditions as suggested.  I "always" do things by the book and would probably end up speaking to them first anyway, just in case something goes wrong during the build.  However, it will be interesting to see what the terms and conditions say.