Renovation project - need advice!!?

cocochambo

Hello 1st time Poster so go easy...

Need some advice- I have seen a house which needs alot of work done to it. It is valued at 175k but willprobably go for more because of the area.

How easy is it to get a 90% mortgage and a Home Improver loan of about 25k? Will need to spend 15k on renovations with the extra 10k going on Fees and topping up deposit.

Is this the sensible way to do it??

Will I be able to remortgage in 12-18mths when the renovations are complete?
When complete the house will be valued at around 250k so think it is worth the effort.

Any advice welcome!!

Doozergirl

If the house is worth £250k when finished and only needs £15k worth of work, then it won't be selling for anywhere near £175k. It will sell for at least £225k OR it needs a lot more than £15,000 spending on it. £15k only covers cosmetic stuff, in which case, the house is worth more in current condition. Houses only sell for undervalue when there is something considerably wrong with them.

But aside from that, if you want to borrow £25,000 then it would need to be secured against property. So the immediate problem is that you can't have a 90% mortgage and a loan for £25,000 secured against it because your borrowings are more than the house is worth. Loans like that don't exist any more.

You need to be in a better position, with savings - at least the full deposit, to be able to take on a project because lenders want to know where your deposit is coming from these days and if it comes from a loan...

You're not in the right position financially to move on this. And honestly, this house will either go for a lot more or it needs a lot more than you think spending on it.

kmmr

15k estimate for work that will take 12-18 months means you are budgeting around £1k per month for the work. I am sure you can save a lot if you do all the work yourselves, but even then £1k per month for materials seems very optimistic.

Who has quoted this work? I would suggest you need to look at your figures again in great detail.

Plus, you want to borrow £25k, some of which is for the deposit? I can't see the bank being too keen on that when you are already looking to borrow 90%.