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  • Moving house

    Hi there,
    Probably a very simple question but, I have found a house which is in need of extensive renovation, my question is if say I purchase the house for 80K but the bank says its worth 100k (e.g. the value once refurbished) can I simply use the extra 20k for renovations, or will a bank only lend the final purchase price (80k) minus deposit?

    Thanks

  • #2
    First bank will lend only purchase price, after that you can remortgage.
    Clerkenwell Property | London Property

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    • #3
      Agreed, you can remortgage after you have upgraded the property ... bear in mind though if prices fall another 10% then your remortage amount will also fall by 10%

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      • #4
        You can also get a self build / renovation style mortgage where a lender will look at its current value and the final value.

        They will lend to you initally for the purchase costs. Each time you improve the property, therefore increasing its value, they will instruct another valuation and lend further further funds.

        Eg- many self build lendersw ill lend 75% of the value at any stage, therefore as you do the work they release more funds.
        Worldwide Financial Planning is a specialist independent provider of Large mortgages.

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        • #5
          This self build / renovation mortgage sounds interesting. My advisors haven't said anything about these.

          Is there any more info you can give me about them? I am looking at various properties at the moment that will require renovation.
          Community spirited? http://www.AshfieldFOCUS.com

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          • #6
            Hi there,

            Do you need planning permission to do the works you intend to carry out? If so you will need the detailed planning permission from the local council to show the lender when you apply for the mortgage.

            You will also need a set of plans showing what the finished building will look like along with a costed schedule of works.

            This way the valuer, whom the lender will send out, will be able to value the plot as it stands now and give it a final value also when the work is carried out.
            Worldwide Financial Planning is a specialist independent provider of Large mortgages.

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