borrowing for renovations

rachsmith7256

Hi, I'm a first time buyer using the council right to buy scheme. I only have to borrow 50% of what my flat is worth. I'm currently waiting for the valuation and offer letter to come through, but as a guide i did a couple of online estimates. The average is that my flat is worth around £60k, so i only need to borrow £30k to buy it. Will I be able to borrow an extra £5k for renovations with me not needing anywhere near what the property is worth?
This won't put me over the amount I can borrow and allows me to meet the monthly repayments easily(from looking at online estimates).
My partner seems to think the mortgage might be paid straight to the council on approval, but I was under the impression the mortgage goes into your bank first then you pay the seller?
Any advice is appreciated.
Thanks

glosoli

When it comes to borrowing more on council right to buy, in my experience, the house value has to increase by the same value as the additional borrowing funds. So for example, if you borrowed an additional £5,000 for windows, then the valuer has to say the the house will increase by £5,000 by doing the windows. However this is only the lenders I am familiar with and may be different with others.

The mortgage will be paid to the solicitor you involve, and the solicitor will then forward the funds to the seller. At no point will you see any of the funds being used to purchase the home.

kingstreet

You will need the Council's written permission to borrow into its discount and you will need detailed estimates for the work and receipts when it's done.

A few years ago, people were borrowing for foreign holidays and cars and that is no longer possible.

The funds are paid to your solicitor who settles the purchase with the council. The mortgage money is not paid to you, as you might understand, as there may be temptation for some to blow it on other things...

da_rule

As has been said, borrowing additional funds for renovations is permitted under the Housing Act, but does require Council consent for which they may require evidence.

Also, as you're going to be a leaseholder you may need freeholder consent (which I assume will also be the Council) for the works you are planning.