More help please! Trying to move. Soooo complicated! Renovation, finances, valuations

Cissi

I think it sounds as if your budget is worryingly tight, unfortunately. Based on those valuations I'd be surprised if you achieved £195k which you say you'd need. EAs will typically mark up what they think you can actually get for the house by at least 10% to give you an attractive asking price and get you on their books. The way the market is at the moment, unless you're prepared to wait for a very long time, be prepared to be told a few months down the line that it's time to reduce the asking price...

I'm also very concerned by these statements:

"We dont have money for fees and conveyencing but we have family who will help if required."

and

"Another issue - how to fund renovations. Would have a small pot left over but nowhere near enough to pay for the basics which need doing."

I can see this turning into a horrible mess with you not being able to complete even the basic renovations - please be aware that this sort of project practically always ends up costing a lot more than you think initially, especially if you aren't an experienced project manager.

I'm not saying that this can't be done, just that you need to go into it with your eyes open and not too many illusions

jennieshrew

"We dont have money for fees and conveyencing but we have family who will help if required."

Ahh thats because we just paid off all our debts. Every penny we had went towards this.

Im still planning. Our family might give us some money towards all this. That would help. If we got the house for £165k a further advance would be affordable but I dont know if they lend you those until a few months after you move in and have done some work already.

Soot2006

a further advance

But if you're at 90% LTV then you're unlikely to get anything more out of them.

A much bigger problem, imo, is how you are going to repay this interest only mortgage? What's The Plan & will the bank approve of The Plan!

jennieshrew

Soot2006 wrote: »

But if you're at 90% LTV then you're unlikely to get anything more out of them.

A much bigger problem, imo, is how you are going to repay this interest only mortgage? What's The Plan & will the bank approve of The Plan!

We are swapping to a repayment mortgage.

New mortgage is 90% yes. If we do some work and increase the value of the property then there will be additional capital in the property which we may be able to draw down to fund improvements.

Yes I know this all sounds difficult but I can only try cant I.

Im sure people have achieved more difficult things on MSE. Surely. People pay their entire mortgages off early on here if they put their minds to it.

I am putting my mind to this!

tyllwyd

jennieshrew wrote: »

... New mortgage is 90% yes. If we do some work and increase the value of the property then there will be additional capital in the property which we may be able to draw down to fund improvements. ...

Sorry but that sounds a bit pie in the sky to me - if you do some work, by spending say £3k on rewiring, then how much do you think the value of the house would increase? £3K? But then it would be a half-finshed project, so arguably the value might even fall before it goes up? Or the renovations might end up costing more than the market value of the finished house. Realistically, it seems very risky to me to go into a project thinking you will be able to borrow more money to finish it, especially since you will need to borrow from family to even cover the fees when you buy. What happens if you can't get enough money out of the house to pay them back? What happens if your finances are so stretched you finish the house but then have to sell because you can't afford the new mortgage?

Cissi

I realise that you're willing to work very hard for this, but unfortunately I think it may all fall down at the very first hurdle.

The top valuation for your house was £205k and you hope to achieve £195k. The house you want to buy is on at £220k, and you're hoping to get it for £160k - and even then you wouldn't have much left for renovations.

Just think about it: how much do you think the locals gossip will estimate that your house is truly worth? I suspect also somewhere around £160k! You may well get a lot more and closer to the EA estimates of £185-195k - but what makes you think that the vendors of the other house will be prepared to accept 27% under asking price while you will only have to take a less than 5% drop (assuming you go for the highest estimate of £205k as your asking price - you could of course start higher).

This is why the entire housing market is frozen at the moment - all vendors seem to think that their house is worth close to asking price, while all purchasers hope to get a bargain...

Nixer

Alarm bells for me are that you can't afford the fees without help, nor quite a lot of the renovation by the looks of it, that interest rates will go up, possibly quite soon, and that it seems unlikely that the vendor will accept 160k - it really doesn't matter what the locals think.

On a more positive note, since you asked for positivity, if it's as overpriced as you think, it will probably still be for sale in a couple of months which might buy you some time to try and save some more for your fees/renovation. Are there cutbacks you can make or possibility of getting some extra work to ramp up the savings a bit? I assume you've factored in that, having paid your debts off, the money that you would have used to pay debts can go into the pot?

What does the new house offer that your current one does not? Is it more space that you are after?