Mortgage Phases Advice

joebloggs123_2

We're looking at buying a house which will cost about £150k (Worth about 400k). We want to do some renovations which will cost about £100k.
We would be looking to buy the house now but wouldn't be doing the renovations for 3-4 years. What is the best way to organise the mortgage to minimise the amount we need to repay?

ACG

Its worth £400k as it stands or once work is done?

joebloggs123_2

As it stands

ACG

When you buy the house, you will only get a mortgage based on the lower of the valuation or purchase price.

After 6 months you can remortgage it based on the valuation. So you could remortgage it at that point to pay for the works. You could possibly look at an offset mortgage.

It could be worth getting advice from a broker who can take all of your details and preferences down and workout the best way of doing it.

Thrugelmir

joebloggs123 wrote: »

As it stands

Why the undervaluation?

joebloggs123_2

Not sure, I'm guessing repossession so we're skeptical at the moment but doing our research to find out the details.
Was wondering if we were better just getting enough for the purchase and then paying off as much as we can for the first couple of years and then remortgage to pay for the modifications.

Wirenth

I'd go for an offset. Calculate what you believe you will need for purchase, plus renovations, and get an offset mortgage for that amount. Park the funds for renovation into the offset savings account until needed.