Loan or Equity? No idea

sarbaloosa

Hi guys,

I had a question relating to a decision in principal.

My wife and I have recently received a decision in principal for a purchase up to the sum of £180K.

We seen a house for £120K and were hoping to do some home improvements to it.

Is there anyway we can get the additional 60K as a loan or equity sum? I have no idea what the correct terminology is as I have never purchased a house just yet. Please can you advise if you are aware of how we can achieve this, if at all?

Thank you

kingstreet

No, you can't.

You'll be able to borrow upto 95% of the lower of the purchase price or current value of the property.

Money to do it up will have to be saved or raised another way and borrowing it will mean a reduced maximum mortgage.

sarbaloosa

If we take out 120K, how likely is it that we could qualify for a 60K loan given that the lenders are prepared to give us 180k? Or am i confusing two separate things?

kingstreet

The two things are unrelated.

Best you can hope is that you do what needs doing, financing it another way, then remortgage to repay the other source as long as the property has increased in value sufficiently.