Renovation mortgage help!

sarahannreid

Hi Guys,

Looking for a bit of advice please! We have been offered the chance to purchase an almost derelict cottage for 70k. We estimate that it would cost approx 30-40k to get into a live-able condition. What kind of mortgage products would be available to do this kind of project? Can you borrow money above the valuation of the property in it's current state based on the projected valuation after completion of works? After the sale of our house we would probable have about 12k for a deposit. The cottage would probably be worth in the region of £160k after renovation, based on research of the current local market.

Any help much appreciated!

Gloomendoom

You might need an 'ethical mortgage'. There are lenders that will lend on recycled houses.

new_home_owner_3

sarahannreid wrote: »

Hi Guys,

Looking for a bit of advice please! We have been offered the chance to purchase an almost derelict cottage for 70k. We estimate that it would cost approx 30-40k to get into a live-able condition. What kind of mortgage products would be available to do this kind of project? Can you borrow money above the valuation of the property in it's current state based on the projected valuation after completion of works? After the sale of our house we would probable have about 12k for a deposit. The cottage would probably be worth in the region of £160k after renovation, based on research of the current local market.

Any help much appreciated!

i dont think you will have any luck, the only way i can see you doing it is having a mortgage and then a additional loan for the improvements.

I dont think any banks are doing 100 percent mortgages and you would need more than that.

property.advert

How does this differ from mortgages for self build ?

phlash

Take a look at ecology building society, they should be able to help.

Ignore the previous posts about not being able to do this sort of venture, you can.

However, you have to make your figures stack up in a more commercial manner.

Google renovation mortgages and self build mortgages.

sarahannreid

Thanks for the help guys, bit of a difficult one! The other option we have is to demolish the existing house (yes it is that bad!) and go down the new build route. Would this be the more sensible option?

oz0707

Obviously you will lose the character but from my recent experience it will be your easiest and most sensible option to go for the new build. Although probably from a lending perspective you would need to have the planing concrete for them to lend on it. ie make an offer subject to planning.

Definatley building wise a new build would be more straight forward and easier to comply with regs.

I have had difficulty obtaining a self build mortgage on a new build because it will adjoin an existing terrace. ie not detached. This also means I cannot get an NHBC warranty on the build. Although I do believe they offer conversion products but all individually judged and more expensive.

Also the mortgages aint cheap. My situation is 60%LTV and should only be 50% of what property will be worth when complete. 6%ish variable, i cannot get a fix! arrangement fee's incl broker etc total 1800. This is also an arrears type, ie I fund build till agreed stages/values. robbery.....

joolley

Speak to Buildstore. They'll put you right.