Mortgage guarantee plus a little.

Jambo5

I am thinking a long the road of buying a cheaper house and doing it up..applying my trade.

If we bought a house for say 100k with a 10k deposit so 90%LTV but ask for a further 5-10k to renovate making it a 100k mortgage? Is this possible or Am I in dream land again?


Cheers

Yorkie1

No it's not possible.

There are no 100% mortgages these days. And you won't be able to borrow more based on an estimate of post-work value; the lending will be based on a % of the property's current value according to the valuer / surveyor.

ACG

You could buy it with a 10% deposit and then get a loan/credit card to do the work? But its worth ensuring you could afford them both.

Jambo5

Aye though so. So just to clarify. If the house was worth 110k and I put 10k down...so a 100k Mortgage then that would be it. If the bank agreed to give me a 100k and an offer was excepted for 95k that money would not be left over? Sorry Im not the best at explaining myself and i'm pretty naive so learning alot at moment thanks.

Contemptuous

Jambo5 wrote: »

Aye though so. So just to clarify. If the house was worth 110k and I put 10k down...so a 100k Mortgage then that would be it. If the bank agreed to give me a 100k and an offer was excepted for 95k that money would not be left over? Sorry Im not the best at explaining myself and i'm pretty naive so learning alot at moment thanks.

Do you mean £95k would be the purchase price?
The mortgage company will always base the lending on the lower of the valuation or purchase price, so there wouldn't be money "left over" if you negotiated a lower price - the lending would have to reduce accordingly.

Jambo5

Ok thanks. Didn't think they would either but just wanted to know. Here is to wishful thinking lol.
But it was asked at work by a lad. As were in Army we can get a loan from them. A workmate asked if say he borrowed 10k could he take a bigger mortgage out to replay the Army. As getting this loan from them effectively ties you to them for years or if you leave you get charged interest on it. And I dont think I have met many lads that want to be tied down in tye Army. However I guess its basically the same question I asked
So will tell him tomorrow. Thanks again