Retention on mortgages for properties requiring renovation

bmth123

Hi --Although i've been a 'lurker' on the forums for a long time, its the first time i've asked a question so hope this is in the right place!! I think its a mortgage question!

My OH and I are considering attempting to purchase a particular property we have seen. We have looked at most issues but have a query re a mortgage retention until property is renovated?

Basic facts--we are looking for mortgage of approx 190,000 to buy property, deposit of 30,000.
Joint income min 60,000 pa (track record of bonus pay of approx another 10000pa)
(we have allowed the extras for legal fees etc from other savings)
20,000 set aside for renovation

I understand that a 'retention' is often put on the mortgage until the property is sufficently renovated. Is anyone able to give any idea as to what % of the overall mortgage this may be or how this can be got around? We will speak to our mortgage broker tomorrow but are interested in other peoples experiences.
We have been lead to believe it could be up to 25% of mortgage but work required is approx 20,000.

Most of the work will be done ourselves (gas and electrical checks done by others). The property was lived in until a few months ago so not that bad (still awaiting the survey!) and we plan to live in it whilst doing it up (and then to make our home there!)

Presumably there must be plenty of other people who renovate properties so how is purchase funded if money is retained until the work is completed?

Many thanks!! :-)

Sobraon

Although rather a long time ago but with similar levels of repair costs the Cov BS retained 100% of the advance. We went into our bank (Barclays) and arranged a loan for the period while the work was being done. It took us 6 months to complete the work and when the surveyor had re-inspected the property the advance was released by the Coventry. Of course the APR charged by the bank was significantly more than the BS

bmth123

thanks for that--i had kind of assumed that noone would want to lend to us when they did a credit check and saw the mortgage but I guess if you explain the circumstances they may consider it. I guess its a matter of knowing who to approach.