Renovation on Mortgage

Housedreams

We have seen a property that is the perfect size and in a good location. It is, however, very dated and needs work. It does need a new kitchen and bathroom. We want to put an offer in, however we wanted to know whether it was possible to lend more on your mortgage for renovation? We have a DIP and the amount we want to lend is far less than what it states on the DIP. We have an appointment this Friday with the Halifax. This is our first mortgage.

ACG

No. Deposit depending you may be able to put down a smaller deposit but you would still need a minimum 5%.

Annisele

The short answer is "no".

Lenders will broadly consider two things when they decide whether to give you a mortgage. The first is whether they'll lend to you (your credit rating, income, etc). The other is whether they'll lend secured on that particular property (is it falling down, is it on the 13th floor of a tower block, is it above a shop, etc).

Normal residential mortgages don't go above an LTV of 95% (ie you can't have a loan of more than 95% of the value of the house). Depending on the deal, you might not be able to borrow more than 80%, or even 60%.

There are some mortgages specifically designed for renovation projects - but they're not cheap. It sounds as though you're talking redecoration rather than major works, so that kind of mortgage probably isn't right for you anyway.

Housedreams

Thanks for the responses. We thought this would be the case but wanted to check. We have a 10% deposit so we may see whether it's possible to give a smaller deposit.