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    • downhillfast
    • By downhillfast 12th Oct 16, 10:03 PM
    • 868Posts
    • 584Thanks
    downhillfast
    Mortgage for property needing refurbishment?
    • #1
    • 12th Oct 16, 10:03 PM
    Mortgage for property needing refurbishment? 12th Oct 16 at 10:03 PM
    Hi there

    We're going to be looking to purchase a property in the next 6 months or so (hopefully!) and we're just trying to get a feel of what we might afford in the areas we like before seeing a broker etc.

    A property came up for sale a few weeks ago and it has got us thinking about taking on a renovation/refurbishment project.

    Purely from looking at the pictures I'd say it is technically habitable although the lender may not agree - no central heating at all (just 2 gas fires and a back boiler) and from the general appearance decor wise it is unlikely to have had any work done on the property since the 1970s - so I'm thinking damp issues (pictures show signs of this), complete re-wire required etc. The asking price is above what I would say it should be worth compared to other properties in the area but it is hard to tell to be honest as there haven't been any exactly like it sold in the area recently.

    The thing is we were looking at trying to get a 95% mortgage as it is, but with a property requiring work are there any lenders that mortgage based on the full value as the property stands or do they hold part of it back until work has been completed as that would eat into our renovation funds?
Page 1
    • RhysHSCC
    • By RhysHSCC 12th Oct 16, 10:23 PM
    • 75 Posts
    • 28 Thanks
    RhysHSCC
    • #2
    • 12th Oct 16, 10:23 PM
    • #2
    • 12th Oct 16, 10:23 PM
    I think it's unlikely given the condition of the property that a 95% mortgage would be achievable as its already high risk. If the lender doesn't decline the application based on property condition, thery would almost certainly apply a retention until the works are done. Unless you have back up funds to complete the funds it's a catch 22 situation I'm afraid
    Mortgage co-ordinator for a building society

    I carry out affordability assessments for new and existing customers.
    I update customers during the application when they call, letting them know where things are at.
    I also answer existing mortgage queries.
    • Thrugelmir
    • By Thrugelmir 12th Oct 16, 10:32 PM
    • 51,277 Posts
    • 43,081 Thanks
    Thrugelmir
    • #3
    • 12th Oct 16, 10:32 PM
    • #3
    • 12th Oct 16, 10:32 PM
    Purely from looking at the pictures I'd say it is technically habitable
    Originally posted by downhillfast
    Why haven't you gone and taken a look?
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • downhillfast
    • By downhillfast 12th Oct 16, 10:35 PM
    • 868 Posts
    • 584 Thanks
    downhillfast
    • #4
    • 12th Oct 16, 10:35 PM
    • #4
    • 12th Oct 16, 10:35 PM
    Thanks. I thought that might be the case. It's a shame as it's exactly where we want to be and even with the renovation would be affordable... but not without a 95% mortgage from day one. Just out of interest what LTV might make something like this achievable based on a property value of say £350k needing probably £20-30k works doing? Once fully renovated I would expect the property to be worth approx £425k.
    • downhillfast
    • By downhillfast 12th Oct 16, 10:36 PM
    • 868 Posts
    • 584 Thanks
    downhillfast
    • #5
    • 12th Oct 16, 10:36 PM
    • #5
    • 12th Oct 16, 10:36 PM
    Why haven't you gone and taken a look?
    Originally posted by Thrugelmir
    Because we're not quite in a position to do anything... it just came up while we've been testing the water so to speak. We don't quite have all funds in place yet so would not be able to get a DIP
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