mortgage advise please on new house

xyellowx

started looking around at what we can expect for our money
will have min 40k out of our sale to use as deposit on new mortgage and affordability seems fine on banking calculators for the 200k max properties we have been looking at

the 200k houses have conservatories on and nice kitchens and bathrooms and we would be looking to offer no more than185-190k

but the houses which need modernising i.e new kitchen/bathroom have no conservatory are up for 175-185k we would prefer this and do it up to how we like, pick new kitchen bathroom conservatory etc

my question is in the current market would a high street bank lend me an extra 15-20k ontop of the property value on a mortgage to do the work ourselves or should we consentrate on the properties which have been updated ?

Wh05apk

Short answer - NO.

They would lend upto the maximum for the product - i.e. 80/85/90% LTV of the purchase price, so if you wanted to have funds for the work, you would need to put a lower deposit, which would mean you would be in a much higher LTV, thereby paying higher rates.

The only other way would be to fund the work with a personal unsecured loan, and possibly consolidate to the mortgage at a later stage.

harvey115

No more 100% mortgage
95% mortgages are very very hard to get

Unless you can fund the development yourself at a latter stage, I do not think it would be that easy. I think you should go for the fully built house (at least the kitchen). You can then save to put in a conservatory at a later time.

kingstreet

If you buy for £200k with a £40k deposit, that's a loan to value of 80%. If you buy for £185k with a £25k deposit, keeping back £15k to work on the property, you'll than have a loan to value of 86%.

This may not seem like much of a difference, but the rate difference between an upto 80% product and an upto 90% product may be significant and affect your costs.

Lenders don't take into account how the work may improve the loan to value until after it's done and you want to change lenders or apply for a new deal from your current lender, so you need to think carefully about your options.

xyellowx

i had noticed the sharp rises in monthly payments depending on the over/under 20% deposit, we would only want a property we could buy for no more than 190k as i dont want to be anywhere near the max we could lend. (think its 220k ish)

good point on the doing the work over a few years will keep the payments down further and we can get it done up to our liking

the loans a no-no even if i could get one off the bank depending on the affordabiltly i need to sleep at night (id be stressing about how much i was paying out each month)