buying a house at 70k though it needs approx 20k work done need help with options?

Big_Bad_Baz_86

hi ya,
I've spotted a house that i'd like to make an offer on though being new to this i was wandering what my options where. The house has been repossessed and is for sale at a a knock down price though the house if done up would be twice the value. The house needs essential work done like plumbing and rewiring, new boiler and improvements to kitchen and laundry rooms as they are in poor condition and as the property has been empty the windows have been put in and need replaced. Though the property is structurally sound with no damage to the roof or attic.

I was wandering if anyone could help explain my options can i get a bigger mortgage to cover improvements or do i take a mortgage and a loan?

pjread

If you mean you need an above-100% mortgage, good luck with that... I don't think I've seen one of those for a fairly long time.

maninthestreet

What deposit do you have?

HappyMJ

You will need to take out a mortgage and then a loan. Most likely you will need 25% deposit on a house in such a bad state as you describe. Then you will need to get an unsecured loan to make the improvements. Once they are all done you can then remortgage to reduce the interest rate on both the mortgage and the loan. If it is as you say the mortgage will then be 50% LVR and you will get a good very competitive rate.

Dave_Ham

Honesty time - you obviously do not have a trunk of cash to throw at this project, are not experienced and unlikely to have bought many properties given your assumed age.

I am hopefully going to save you some money here. When you are down the pub with your mates or at the dinner table at home, the fag packet calculations look lovely on this rounding up all the costs trying to play safe with new boilers etc.

This is rarely the case, as if the deal is that good the price will go up and up. Given it being a repo they price low to engage interest with the provido you complete within 1 month.

They can pull the plug (and do) at any point when someone who has done this many, many times and has the cash in the bank comes in 2 days before you are due to exchange and trumps your offer.

This is a minefield and avoid like the plague.

Good on you having a plan, but there are grave risks at play and not something I would recommend you start playing with.

Good luck

paulmapp8306

As dave says - leave it alone unless you have the funds to buy it quickly.

Having said that my sister bought a repo for £130k a couple of years ago. It too was in a poor state of repair BUT not as bad as your post suggests the one your looking at is.

My sister bought with a 50% LTV using ingheritance money and moved in anyway (boiler and windows were fine) and completed inside a month. She then sold her old house which raised funds for the preapr. Its now worth over £200k.

She had not done anything like that before BUT knew she had to move fast, had a mortgage agreed in advance (was looking for something bigger) so could move - and with the LTV and a house to sell for repair money it wasnt such a big gamble.

kingstreet

Big_Bad_Baz_86 wrote: »

The house needs essential work done like plumbing and rewiring, new boiler and improvements to kitchen and laundry rooms as they are in poor condition and as the property has been empty the windows have been put in and need replaced

This property is likely to be unmortgageable, or subject to a 100% retention and I suggest is unsuitable for someone who hasn't got a large wad of cash of around the purchase price.