Advice about mortgages for a rennovation project

loganwilliams

Hi, looking for a bit of advice regarding buying a project to rennovate.

I'm looking to buy a house (around £250k) and only want to put a 5%-10% deposit down so that I have the spare cash to rennovate it (it hasn't been decorated in 20 years!). Now I don't want to get stuck on a mortgage where its a 90-95% and I'm paying silly rates as I know once the property is complete it should be worth around £300k. My hope is then that I will have 20-25% equity and can remortgage to be on a lower rate.

Is there any simple way of doing this or am I going to have to get one mortgage and remortgage in 6 months? Could I get a self build mortgage or something similar? Would it be best to invest all my capital and have an initial 75-80% mortgage and get a home improvement loan on top?

Just have no idea on what is the best and 'easiest' way. I don't have the cash for a large deposit and to rennovate, can only do one or the other.

Many thanks in advance for any help you can offer.

kingstreet

Google "mortgages for renovation projects" or speak to a recommended whole market mortgage broker.

Thrugelmir

loganwilliams wrote: »

I don't have the cash for a large deposit and to rennovate, can only do one or the other.

Why not do the renovations as your budget allows?

amnblog

Is it mortgageable?

Buying to renovate is not the simple process new buyers take it to be.

loganwilliams

It is morgageable, just in a bit of a grotty state.

I am a seasoned house buyer, just never undertaken a 'project' before and so its not your usual straightforward mortgage situation for me.

Plus, doing it slowly would be great, but not an option with a growing family...the place is not 'clean' or completly 'safe'.

Think I have found a few mortgage choices now, so thanks 'kingstreet'.

GMS

loganwilliams wrote: »

the place is not 'clean' or completly 'safe'.

Not safe as in??

dimbo61

This idea is full of more holes than a Swiss cheese!
Seasoned house buyer but only 5/10% deposit.
Buying at the £250K stamp duty limit but hope it will be worth £300K after doing up######.

I love watching all the OLD episodes of Homes Under The Hammer from 2007/2008.
Bought at auction for £85K quick paint job and new bathroom/kitchen from B&Q and now it's worth £125K
If you are buying the cheapest most run down property in a nice part of London maybe just maybe it might go up by £50K in six months after spending £25K on refurbishing the property.
Buyers and Lenders can quickly check what you paid only 6 months before and surveyors are now very cautious so if you paid £250K why is it now worth £300K unless you built a large extension.
Mortgage and remortgage costs after 6 months to get a better deal ?
If you have deep pockets and the right team you can add value but you also want the buyer to pay 3% stamp duty if you sell which is nearly £10K on top.
If you bought for £250K why would another lender think it's worth £300K six months later.

loganwilliams

GMS - not safe as in kitchen is falling apart, as is the main bathroom. So need immediate replacement.

dimbo61 - I'm not sure you 'get' what I'm discussing here. I'm not in this to make a quick buck. I'm looking for a long term home for my family, that I can do up and add value to. Basic maths dictates that if I buy a property for £250k and spend £20k on rennovation (doing a lot of work myself) then it should be worth around £270k at the very least least.

Prices in the street for very similar properties (actually they have slightly smaller gardens and 1 less garage) are going at £305k, so to be stripping the whole place back to its shell and renewing, including gardens and making the place a good, clean, new home should make it the same sort of price as everyone elses. I would then just like to get some appreciation of that from a mortgage supplier so that I can benefit from a lower mortgage (better LTV) and save myself a few quid each month.

Actually a smart plan I think! Why pay more than you have to?

I have now found a few suitable mortgage products, so no need to respond.

fiesta04

It would be nice if you kept us up to date, as to how it all goes.


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