Mortgage with extra for renovations

stuartbartley

Hi guys

my girlfriend and I have a deposit of around 25k and want to buy a house that is around £120-125k but is in need of modernising. Structurally it is fine but needs a lot of decorating, carpeting etc. Is it possible to get a mortgage with an extra say 5-10k to carry out this work? We want to use all our money on our deposit so that we get lower interest rates with the higher LTV.

Cheers

stuartbartley

forgot to mention that we have a combined annual income of around £43,500

beecher2

No - the only way to keep 5 or 10k would be to lower your deposit, taking you above 80% LTV. If it is just decorative work, then why not do it the old fashioned way - save up and do things as you can afford them.

Crinz

depends who you go with. either way it wouldnt be easy as they will set the maximum value of the property as your purchase price so will use that to base the LTV limits.

One thin you could do it take a mortgage with 15% deposit, wait a few months then apply for additional borrowing for home improvements. That way only the extra borrowing will be at a higher rate.

You will have to check on the timescales for this though. Halifax have a 6month rule so you may find other companies shorter/longer. You will also need to find a company who will allow additional borrowing past a certain LTV.

If you are borrowing 100k, what was the afforadbility figure you were given on your AIP? or have you not got that far yet?

Basic answer is that I dont know of any way of getting this up-front without affecting your LTV and ultimately your interest rate. Unless anyone wants to state otherwise????

stuartbartley

thanks for the quick responses guys

creeper - i was afraid you might say the old fashioned way, looks like it will need to be that!

crinz - we don't have an agreement in principle, my sister works for HBOS and a mortgage advisor spoke to us and we can afford around 160k but would prefer a mortgage with 80% LTV due to the lower interest rates, so we are looking to spend below 130k. 85% would probably be our maximum, although with the renovations required this might have to be an option.

Crinz

80% doesnt get you a lower interest rate with HBOS. 0-75, 75-85 and 85-90 are their bands

might just solve the problem.