Mortgage Ideas

rnm

Hi

I am looking to buy a property for about £165-170k and want to spend about 35k on it, this will be worth say £210 after the work has been done.

I only have £20k in savings and currently rent at the moment; this will be our home. Can i get a mortgage which will pay for the initial property and then give me extra to pay for the work based on the end value?

I am a professional if this makes a difference.

Thanks for any help in getting our home

silvercar

I am looking to buy a property for about £165-170k and want to spend about 35k on it, this will be worth say £210 after the work has been done.

Financially, does this really make sense? Wouldn't you be better off buying a house for £210k that doesn't need any work?

You could then find a mortgage for a £210k property with a £20k deposit.

rnm

Thanks SilverCar

On the face of it, I appreciate it doesn't sound like sense - but...

The house is the one we are renting thus saving:

1. Estate agent fees
2. Removal fees
3. Set up costs (Phones, redirection, cable, etc)

I may have underestimated the numbers a tad, we could buy the house for £165-£170k it is worth about £180k.

When we have spent the money we will have a place that we really like and to our design (structure is fine; but needs elecs, kitchen, bathroom, plumbing and windows).

The post-work value is a minimum, If i was to be less cautious it might make £230 in todays market (if we did the renovations to a high enough standard).

Plus - the wife loves the place :rolleyes:

silvercar

Getting 100% mortgage is possible, that would be 100% of the price you are paying. Then spend your savings on doing it up.

I know that doesn't give you all the money you want and mortgages greater than 100% are available, but they are generally at a much higher interest rate.

lisyloo

Could you buy the house initially and then do it up gradually by saving.

Perhaps you could get an interest only mortgage and use the capital repayments for the first few years to do it up (ONLY recommended if you are disciplined as you HAVE to go back to repayment).

You are living in it right now, so it sounds like it's habitable i.e. these are "discretionary" improvements. You don't deperately need them.

I think this method is preferable because if anything nasty happen (like say redundancy or sickness) then you can simply stop spending the money (although I accept you have to make some large purchases like a kitchen).

rnm

lisyloo thanks for that,

you're right they are discretionary - but the windows for example are a nightmare! you've given me some food for thought :T

likewise silver car :T

any other suggestion gratefully received :j

lisyloo

Another alternative (again I only recommend if disciplined) would be to borrow the money on 0% credit cards and then pay it back out of savings (or possibly capital repayments).

We did this recently to buy a car as our mortgage lender would have taken too long and we would have lost the car.
I don't have a problem with TEMPORARILY using the capital repayments to pay for the car, because originally the money would have been on the mortgage ANYWAY.

However if you are the kind of people who will spend any spare money on shoes or gadgets then forget my suggestions :-))
Also be careful with your credit rating. Try to do it at a time when you won't need to take out other credit otherwise you'll rating might take a hammering.

I got a £15K limit with Egg (max 0% is £14250) and it only cost £50 in fees. I think they are doing it for 9 months at the moment.

rnm

thanks lisyloo,

we are disciplined 90% of the time, but in that 10%...oops!!

I am happy to have zero debt at the moment and like to keep it that way - other than a mortgage, but again i will chew over the suggestions

:T