New house purchase + refurb - is this doable?

Moneycat

Dear Forum membersWe have seen a near perfect house in a great location for which we have put an offer in (awaiting to hear if accepted). The house is perfect except that it needs a full refurb. Our plan is as follows - does this seem doable? Household income - £7,200pcm net (includes both of us) Savings in cash - £83,000. Assets - current house value £280,000 (mortgage outstanding £150k) - costing £826pcm. BTL property - Value £180,000 (mortage outstanding £5,000) - net income £700pcm. No children, no debts. Put in an offer of £345,000 (asking price £375,000). Works estimated in the region of £50,000. Plan- use cash to put down 20% (£69k - leave rest for stamp duty), get mortgage for 80% (£276k). Survey & and other fees to be saved (£2,500 saved monthly). Re-mortgage BTL property for £50,000k to fund refurbishment.-The plan seems to work on paper - but would it in practice? Any comments appreciated! Apologies for lack of paragraphs, can't do them from this computer (!)

R_P_W

You can't do paragraphs? Why?

monty-doggy

Moneycat wrote: »

Dear Forum members

We have seen a near perfect house in a great location for which we have put an offer in (awaiting to hear if accepted).

The house is perfect except that it needs a full refurb.
Our plan is as follows - does this seem doable?

Household income - £7,200pcm net (includes both of us) Savings in cash - £83,000. Assets - current house value £280,000 (mortgage outstanding £150k) - costing £826pcm.

BTL property - Value £180,000 (mortage outstanding £5,000) - net income £700pcm. No children, no debts.

Put in an offer of £345,000 (asking price £375,000).

Works estimated in the region of £50,000.
Plan- use cash to put down 20% (£69k - leave rest for stamp duty), get mortgage for 80% (£276k).

Survey & and other fees to be saved (£2,500 saved monthly).
Re-mortgage BTL property for £50,000k to fund refurbishment.-The plan seems to work on paper - but would it in practice?

Any comments appreciated! Apologies for lack of paragraphs, can't do them from this computer (!)

Paragraphs in

Moneycat

Thank you Monty-Doggy.For some reason the work computer does not allow me to do it. Appears fine in the box when I'm typing it, but when posted, the paragraphs disappear. Don't have the same problem from home (I usually post under a different name but thought I get a new log in as giving out too much personal info on this one).Now - anyone good with a calculator???

maninthestreet

Are there two BTL properties involved - one you currently own, and another you want to buy?

Moneycat

No, just 1 BTL property at the moment (rented out).We would like to keep the current house and live there until the works have been done and then either to sell it or remortgage for BTL.

BitterAndTwisted

That's a lot of mortgage-exposure for people with a joint-income of less than ten grand per annum

Mallotum_X

BitterAndTwisted wrote: »

That's a lot of mortgage-exposure for people with a joint-income of less than ten grand per annum

Its 7,200pcm so 86k per year

Moneycat

Mallotum_X wrote: »

Its 7,200pcm so 86k per year

Yes, this is take home - ie. net

BitterAndTwisted

Hell's bells, you could raise a huge mortgage with that much net income a month. If you feel your jobs/income is pretty secure you should just do it. Sod it, you should just do it anyway

Moneycat

Thank you! That's what I feel too, excited at the prospect BUT also very scared as we've never attempted such a big project (full refurb to a 3 bed). Head says it's doable but that much debt scares me to bits. Equally, I also think that now would be the time to do it if ever.As for job security... what's secure nowdays... OH has a permanent contract, mine is a fixed term - due to expire 2016 but it is renewable.We have always lived within our means - and always borrowed to the tune that if one loses their jobs, we can still manage. We have both been very lucky jobs wise in recent years and we know that - the humble beginnings will always stay on back of your mind.