Mortgage Higher than selling price?

emmaur1

Hi

We are currently looking at buying a property which needs some work doing to it.

It is up for £54,950 but were looking at getting a mortgage of £70,000 in order to complete the renovations.

We already have a mortgage approved with Nationwide of up to £93,000 but I am not sure of how this would work with mortgages that are higher than the sale price.

We would still be putting down the 15% deposit required (£10,500), would it be possible to do this?

Simalar house prices in the street: http://www.houseprices.co.uk/e.php?q=dh47ha

Any advice would be greatly appreciated. Thanks Andrew

somethingcorporate

I really really hope not!

WTTM

emmaur1 wrote: »

Hi

We are currently looking at buying a property which needs some work doing to it.

It is up for £54,950 but were looking at getting a mortgage of £70,000 in order to complete the renovations.

We already have a mortgage approved with Nationwide of up to £93,000 but I am not sure of how this would work with mortgages that are higher than the sale price.

We would still be putting down the 15% deposit required (£10,500), would it be possible to do this?

Simalar house prices in the street: http://www.houseprices.co.uk/e.php?q=dh47ha

Any advice would be greatly appreciated. Thanks Andrew

Crazy question, can't believe you are serious.

Explain where a 15% deposit comes into the 127% motgage that you propose.


MOMENT

emmaur1

Yeah maybe I havnt explained that at all well.

I meant more like purchasing the property for instance for the asking price, less the deposit, and then getting a personal loan to cover the renovations, but is there anyway you could get this all rolled into the mortgage rather than seperate?

beecher2

If you buy a house for £54,950 and are going for a 85% LTV, your mortgage will be £46,707 and your deposit will be £8242. You can't get a mortgage for more than the value of the house.

emmaur1

Right, so should we be able to get a personal loan for renovation work based on the usual financial checks obviously entirely seperate to the mortgage?

somethingcorporate

Yes.......

Thrugelmir

emmaur1 wrote: »

Right, so should we be able to get a personal loan for renovation work based on the usual financial checks obviously entirely seperate to the mortgage?

Expensive way of borrowing.

beecher2

emmaur1 wrote: »

Right, so should we be able to get a personal loan for renovation work based on the usual financial checks obviously entirely seperate to the mortgage?

Maybe, but it'll cost you a fortune. Can't you use the £2k you already have and do the rest of the work as and when you can afford it? Presumably the house is in a livable condition as you are intending to get a mortgage on it.

emmaur1

Yeah, think it will work out a lot more expensive that way.

It has been repossesed, needs a new heating system, maybe rewire (but need to check fully) and a few other bits and bobs.

Definately will be better (Definatley cheaper) buying it and doing it slowly with my own money rather than the banks.

Cazza

Emmaur1 - Nationwide won't do this as part of the mortgage. Northern Roack used to - have you ever hear of Together mortgages, where they lent 100% or 125% of the property's value?? The idea you have is exactly what Northern Roack did.

Strictly speaking, there is nothing to stop you taking out a loan after completion, in order to do the work. I would strongly suggets that you go and talk this through with your mortgage adviser, who knows your circumstances, before you go any further with this purchase at all - you could possibly be opening a very messy can of worms.