Mortgage offer needed quickly for renovation project

Let_Us_See

I assume full planning consent has already been granted? Has a schedule of work with costs been agreed?

Before going down bridging path (which will probably cost at least 1.0% per month with fees, and subject to building delays etc.) investigate Development Finance (retained ownership) as this will be a lot easier and cheaper way of financing development with stage payments.

j500_2

Yes, full planning consent has been granted, and a full schedule of works with costs agreed. Having had a look online there does appear to be companies offering Development Finance. Its still a catch 22 in that we don't actually need the finance until its complete.

Let_Us_See

In that case go ahead if:-

1. You are confident you have the funds to purchase and COMPLETE the renovation.
2. The condition and value of the property will meet mortgage criteria.
3. You will meet lending criteria in respect of age, income, affordability, credit file etc.

I find your comment "we don't actually need the finance until its complete" a little confusing. Is the requested £272,000 needed to complete the purchase or not?

Thrugelmir

Try Buildstore.

Personally I would be buying the property as is. Then contracting for the build as a separate issue. That way total control is maintained.

j500_2

Let_Us_See wrote: »

I find your comment "we don't actually need the finance until its complete" a little confusing. Is the requested £272,000 needed to complete the purchase or not?

Sorry, I meant we don't actually need the finance until its finished, i.e. the renovation work is done and the building control certificates are obtained. Its at that point that we'd be expected to complete the purchase.

j500_2

Thrugelmir wrote: »

Try Buildstore.

Personally I would be buying the property as is. Then contracting for the build as a separate issue. That way total control is maintained.

That's a good suggestion, however the property is grade 2 listed and being made into a number of other dwellings by the same builder who is working with the owner/seller on the whole project. Choosing a different contractor isn't an option unfortunately.

Someone else has suggested putting a cheap kitchen sink and a toilet in it so it can be valued as habitable.

I'm sure there is a way and will try Buildstore, thanks.

j500_2

If anyone is interested in how this progressed, we found a lender who saw sense and was willing to offer a mortgage for this. Our situation seemed impossible with lenders not willing to value an uninhabitable house and the offer only being available once finished and valuation done. In addition the fact that its an apartment put some lenders off, they are not keen to lend on building sites when next door's wall or roof might fall down during the works. But we don't need the money until it is finished!

It turned out to be just a regular mortgage from a high street lender, but with a long validity period on it of 6 months. This is pretty common for those buying new build properties (rather than self build and renovation projects), so its the same situation exactly as if it were a new build flat, and the same rates.

It was just the way it was being couched to brokers/lenders. The fact that we were paying for some work on the property just clouded the issue.

So we got a decision in principle on Thu (actually two from two different lenders), and rather than wait 2 weeks for the valuation and the formal offer we've decided to exchange on Wednesday so as not to hold the builder up. Hope this is the right thing to do!

We look forward to planning everything about our dream home

J

amnblog

So after all this you did not actually need to borrow any money on the property until the renovation is complete and you are completing the purchase?