Using a Mortgage for Renovations

pinkteapot

ZanderMJW wrote: »

We already have an agreement in principle with a bank (Nationwide) for a 92% LTV, can they change their decision if we lower the amount we put forward for the deposit because we're raising the LTV?

The amount they've said they'll lend you in the AIP is limited by two things:

1. The highest LTV they'll lend.
2. The maximum they'll lend you, based on your income and financials.

So, you could earn bucket-loads and only want to borrow £100k, but they still won't go higher than a certain LTV, eg 95% on any given property. In that case, the LTV would be the limiting factor.

Specific mortgage products will have a max LTV but usually these are round numbers - 70%, 80%, 90%, 95% etc. The fact yours is at 92% may mean that the limiting factor was instead the amount of money they'll lend you. Eg if it says £156k, that may be the most they'll lend you, even if the LTV wasn't quite that high.

The only way you'll know is to go back and ask them - tell them your new deposit and expected purchase price and see if they'll lend.

ZanderMJW

pinkteapot wrote: »

Does the work NEED to be done straight away? What form of heating does the house have at the moment?

What I'm getting at is whether you could move in and then save up to have the heating work done...

Also bear in mind that if you're talking about installing new radiators etc then damage will be done to the walls and possibly floor coverings, so make sure that £4.5k cost includes all redecoration afterwards, unless you're prepared to live with the mess until you can afford to tidy it up.

It doesn't necessarily need to be done straight away but there are only two sources of heat in the house - An electric fire in the front room and an electric heater in the bathroom and that's it. I guess we would just wrap up warm! It doesn't include those costs to be fair but we'd need to pay those costs either way as the house needs modernising with regards to carpet & wallpaper all around the house.

Does anyone on here have any experience of having central heating installed whilst living in the house? I know it takes around 5 days to be installed generally I just wanted to know what the whole upheaval is like? If necessary when we've got the money we could live with relatives for a short period of time. How much 'damage' is done to the house etc.? Would we have to take the beds and furniture out or just move it around?

pinkteapot wrote: »

The amount they've said they'll lend you in the AIP is limited by two things:

1. The highest LTV they'll lend.
2. The maximum they'll lend you, based on your income and financials.

So, you could earn bucket-loads and only want to borrow £100k, but they still won't go higher than a certain LTV, eg 95% on any given property. In that case, the LTV would be the limiting factor.

Specific mortgage products will have a max LTV but usually these are round numbers - 70%, 80%, 90%, 95% etc. The fact yours is at 92% may mean that the limiting factor was instead the amount of money they'll lend you. Eg if it says £156k, that may be the most they'll lend you, even if the LTV wasn't quite that high.

The only way you'll know is to go back and ask them - tell them your new deposit and expected purchase price and see if they'll lend.

Thank you for that explanation - It makes a lot of sense to be fair, I think you're right though - Best to just call up and ask!

somethingcorporate

Nationwide are pretty good so a call to sound them out is a reasonable idea.

I've had radiators and pipework moved about before but not a full central heating install but don't see how it would be hugely different. It can be quite disruptive to lift floors and bits to put the pipes in and will be dirty work but it will likely be a room at a time rather than the whole house being totally inhabitable although if you could find somewhere else to live you will probably save some labour cost as working in an empty house is quicker than working in one that is lived in (i.e. they wont need to tidy up every day for starters!).

caronoel

How urgent is to do this straight away?

Could you hold off until you come to remortgage in a few years? your LTV should be a lot healthier then, allowing you to borrow the extra funds required.

ZanderMJW

caronoel wrote: »

How urgent is to do this straight away?

Could you hold off until you come to remortgage in a few years? your LTV should be a lot healthier then, allowing you to borrow the extra funds required.

We could - Personally I've not lived in a house without central heating before so I don't know how bad/not so bad it will be The main worry is that if we do wait for the central heating then we'd decorate once we moved in which could potentially get ruined once the CH is installed Unless we're being paranoid but I'd have thought lots of work would mean damaged carpet & walls etc.

somethingcorporate wrote: »

Nationwide are pretty good so a call to sound them out is a reasonable idea.

I've had radiators and pipework moved about before but not a full central heating install but don't see how it would be hugely different. It can be quite disruptive to lift floors and bits to put the pipes in and will be dirty work but it will likely be a room at a time rather than the whole house being totally inhabitable although if you could find somewhere else to live you will probably save some labour cost as working in an empty house is quicker than working in one that is lived in (i.e. they wont need to tidy up every day for starters!).

Yeah, I think we'd move out for the time that they did the work, especially if it saves money! What was your experience with regards to the mess caused in the house when you had the work done if you don't mind me asking?

Azure11

I've had central heating installed and it's not too messy really - it's just access to under the floor means you might have to move furniture and floor coverings etc. But the main thin I have found is when they say it will take 5 days just make sure that they set aside those 5 days and don't go off on another job half way through!! Having said that it can get a bit messy (dust etc) when installing the boiler because of the hole required to the outside. If you are going to reduce your deposit check the rate you will get for your mortgage as you may have to pay a higher rate for a smaller deposit.

ZanderMJW

Azure11 wrote: »

I've had central heating installed and it's not too messy really - it's just access to under the floor means you might have to move furniture and floor coverings etc. But the main thin I have found is when they say it will take 5 days just make sure that they set aside those 5 days and don't go off on another job half way through!! Having said that it can get a bit messy (dust etc) when installing the boiler because of the hole required to the outside. If you are going to reduce your deposit check the rate you will get for your mortgage as you may have to pay a higher rate for a smaller deposit.

Okay so do you reckon that if we redecorate (paint the walls, new carpet etc.) that wont get ruined when CH gets installed? Good to know about them going off on other jobs! Don't want that happening! I don't think we'll be reducing the deposit now to be honest, I think if we do go for the house we'd just live in there for a while and save up for the CH

Dan-Dan

I am not sure its a wise idea to decorate and especially carpet , before CH is installed

ZanderMJW

Dan-Dan wrote: »

I am not sure its a wise idea to decorate and especially carpet , before CH is installed

That's why we're asking tbh, we're new to all of this so not sure if it is or isn't a good idea

martinsurrey

Are you sure its just the CH that needs doing?

I would instantly wonder if the electrics are up to scratch, you could easily be looking at a full rewire as well...