Refurbishment Mortgage

Dev86

Hello,

Can someone tell me if it's possible to take a mortgage out on a house that's worth perhaps 10 grand more than the property value and to spend that 10 grand on, for example - a New kitchen/Bathroom or other general updates.

Cheers,

Andy

TrickyDicky

Basically no. Lenders lend against the current value, and will give a max of 90% of that. Any refurbishing has to come from your own pocket (after your 10% deposit)
The value is whatever someone would pay for it in its current state. Lenders will not lend against potential value (but kitchen/bathroom updates are not likely to increase the value by anything near what you paid for them).

phlash

i.e. a +100% LTV mortgage....

There has been a credit crunch. Stupid mortgages do not exist anymore.

Ask yourself the question, your mate comes to you and asks to borrow £50k in order to buy a car worth £45k. He says don't worry, if I get into trouble you can have the car. Would you think that was a good deal or on the risky side? Your security is worth less than the loan - I would hope you would tell your mate that the deal wasn't favourable and to look elsewhere.

There are renovation type mortgages, but these are not simply available in order to put in a new kitchen and certainly not available at the LTV you're hoping for.

Dev86

Excellent responses - Thankyou.