How far do lenders look at quotes for Home imp?

feekerry

I’m currently remortgaging to do an extension. We have been asked to provide a quote for the proposed work. How much to mortgage companies scrutinise the quote? For example do they contact the company that gave you the quote? Do they comment on whether the quote is reasonable or not? Are you committed to using that particular company that gave you the quote?
I ask as we have had several quotes over the last few months and we are still not 100% who we would go with. The extension is under permitted development so haven’t needed pp. I have given the lender a quote but I wouldn’t want to be tied to that company indefinitely?

Theguywhovapes

Hi feekerry

It’s unlikely they will contact the companies providing the quote (data protection). They probably just want to check the amount you are applying for stacks up to with the quote you have been given. It could also be the lenders policy to ask for this information.

I really wouldn’t worry about this

Fiesto88

They’re unlikely to bat an eyelid unless there’s something very questionable. For example, the extra amount being borrowed appears excessive in relation to the value of the property. Also, a lot of people apply for home improvements loans when a quick look at their credit file suggests they’re doing a bit of cheeky debt consolidation.

YHM

It usually depends on the amount the lender is releasing back to you, as opposed to the property value. Is it a significant extension or are we just talking £10000?

feekerry

Well we are actually doing the extension and clearing debt so that’s all been stated upfront.
I just don’t want to commit to a particular quote or builder at this stage.

feekerry

YHM wrote: »

It usually depends on the amount the lender is releasing back to you, as opposed to the property value. Is it a significant extension or are we just talking £10000?

It is a fairly significant extension yes. Including the consolidation of debt and the extension it takes us to 76% ltv

ACG

It will depend on the lender and the details.
When I worked for a bank we would take a sense check in the first instance.

For example, if your home is valued at £100k and you are saying you are putting in a new kitchen for £30k, that is not going to make much sense. If your home is worth £500k then a £30k kitchen makes more sense (in theory). Then they looked at whether it was realistic. If you live in a second floor flat, you are hardly going to be putting a conservatory on the back. Like wise if you live in a ground floor flat you are not going to be converting the loft.

However, it really does vary. Some lenders do not ask for anything, others just want a quote and others will look in to it in some detail. It will come down to the lender and how much you are looking to lend.

You wont be tied to the builder whos quote you sent in however.

glosoli

Another reason for asking for the quotations is to ensure the correct level of borrowing is provided. For example, if releasing £30,000 but the home improvement quotes are £10,000, then questions may be asked as to whether you are borrowing too much. On the flip side, if the quotes are for £35,000, then they may ask how you intend on funding the difference.

You wouldn't be "committed" to using the builder who provides the quotes, but the lender does need a quote on file which somewhat matches the additional borrowing you are asking for.

YHM

Ok, well in answer to your question. Then no, a lender generally would not stipulate which builder / quote to go with.

They can however request copies of quotes / invoices etc to make sure the monies released are appropriate to the applied intent, if that makes sense. Sounds like you are beyond that stage anyways.

feekerry

We have had various quotes over last 6 months that vary between 35 and 49k. I have provided one of the higher quotes (44k) as it appears the most comprehensive professional quote however I have had no contact with the provider of the quote since and I was wondering whether I would need to tell them that someone from our lender may contact them about it and that would make it sound like I wanted to go with them

glosoli

The mortgage lender wouldn't contact them, never heard of that before.