Taking a mortgage out more than house value

Mrs_Imp

There are very good reasons that 100% mortgages are no-longer available.

Firstly, house prices are not guaranteed to increase. If a property loses value, then the lender will not be able to recoup their money.
Secondly, if a buyer defaults on their mortgage and the bank has to repossess and resell, it is unlikely that they will be able to sell it for its full market value.
Thirdly, negative equity is not a nice place to be if you need to sell.

The lender must be able to get their money back, and these days, the only way to do this is to ensure a LTV that is beneficial for the bank.

You can look for a cheaper house, haggle the price down, or save up before you undertake any works needed.

Does it really need a new kitchen and bathroom? And will it really cost 10k to do? Our new kitchen was about 2k all in, including appliances, cupboards, boiler, rewiring, replastering etc. Our bathroom was under 1k all in, including replastering, rewiring, installing heating, etc. Had it come to it, then our old bathroom would have been acceptable (after 2 days of industrial strength cleaning fluids).

quintwins

Can you not do it on the cheap? you can pick up kitchens on gumtree for a few hundred and basic bathroom suites are cheap enough, i would take one things at a time an dthink of the money your saving by not having interest added , then again i really am a make do person and prob wouldn't change the existing kitchen bathroom unless they were really really grotty.

if a 2ndhand kitchen does appeal to you i'd say go to ikea they have kitchen for less than £1 (depedning on size) and if you shop around white goods are cheap enough.

mrchiggles

Agree with the other posters, you need to be creative about your renovations. We bought a place that needed loads doing it but we just did things in stages, saved up for the things that needed cash (like builders), looked out for good deals (like B&Q kitchens 0% APR on everything inc applicances with lots of discounts) etc when they came up.

You don't need to spend all that cash straight away unless it's uninhabitable, work out a plan over the next few years about what money you'll have when and what the priorities are and if you can use credit sensibly to fund bits of it then do so.

Hillbilly1

If its just cosmetic updating £10k is way too much to spend on a 90k property.

We spent £12k on our last flat and sold it for £300k. We redecorated, recarpeted, new bathroom (travetine tiles), new kitchen (All Smeg appliances integrated), new fireplace. Square footage was probably about the same as a 2up/2down house.

I didn't want to spend that much but Husband wanted his "dream" kitchen, which the new buyers really liked!

Doing new flat on smaller budget!

mummybaker

We asked a similar question of our mortgage advisor and was told they may do it if theres major alterations like an extension but they will hold the money back until the work has been done or almost done. I guess they would safeguard themselves against you sayingyoud be adding 2 bedrooms only to find youd spent it in florida lol.

It's worth speaking to your mortgage advisor, they will know best