Specialist mortgage

Mortgage_hunter

Hello there,

My husband and I are looking to buy a house which doesn't have much of a kitchen and would like a mortgage that would release funds to allow us to build a kitchen taking in the existing double garage. I know that such home improvement mortgages exist, but I don't know much about them. Is it possible to get this type of mortgage on an interest only basis? We own our current home outright and would like to rent it out for now, and then sell it up to pay off the mortgage.

ACG

Generally speaking it would be a bridging loan you would be looking at.
They do not usually go up to 100% (or more) although they can do if they are secured against additional property.

Beware... they are not cheap, but you can do it on interest only or even do it where the interest is rolled up and paid at the end. Interest rates start from around 0.6% per month but go up to around 2% per month. Fees are typically in the region of 1% of the loan amount plus legal and valuation fees.

Best to find a broker on this I think as they are not mainstream products and you may find you are missing out on some of the better deals by trying to do it yourself which because of the rates/fees involved could end up being quite costly.

Mortgage_hunter

Thank you.

We are going to use a broker, but I wanted to be as informed as possible in order to make a better choice. We do have money for a deposit, up to 20% of the value of the property + improvement work (I am waiting for a quote on the work so don't know precisely).

You have given me lots to think about.

ACG

If the figures stack up you may be able to get away with a normal mortgage - the criteria tends to be habitable, hot running water, bathroom, kitchen.

They do not stipulate the condition but if you would get god knows how many diseases from making a bacon butty there then chances are its not going to pass. If however its just dated then it could be fine (my house when I bought it had a kitchen and bathroom from the 70s) they passed but within a month of me getting the keys they were gone.