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House buying/ Borrowing more to renovate
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Joeread
Posts: 54 Forumite
Hi all
I am looking to buy a house in a particular area, I can get a house that is £400,000 but needs about £40,000 work done to it to make it look perfect or i can get a property that needs no work but is worth £450,000.
If I were to buy the house that needs work can I borrow more money on the mortgage?
If so how is this done?
Thank you
I am looking to buy a house in a particular area, I can get a house that is £400,000 but needs about £40,000 work done to it to make it look perfect or i can get a property that needs no work but is worth £450,000.
If I were to buy the house that needs work can I borrow more money on the mortgage?
If so how is this done?
Thank you
0
Comments
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The mortgage lender will value the property when you buy it, and lend you a percentage of what they value it at.
Often the max percentage (loan to value) is 90%, but it looks like there are a few lenders who will lend 95% or maybe even 100% - but interest rates will probably be higher.
No mortgage lenders will lend you more than 100% of their valuation (even if you say you intend to use the money to renovate.)
So as an example:
- You offer £400k for a house
- The mortgage lender values it at £390k
- Their max ltv (percentage they will lend) is 90%
So they will lend you up to 90% of £390k = £351k
(In theory, you could remortgage after you've done the work - but in reality, people are normally disappointed with the valuation after doing work.
i.e. You spend £40k on the house, but the mortgage lender still values it at £390k.)0 -
This is the best answer I have ever had on this website thank you so much for your time:money:The mortgage lender will value the property when you buy it, and lend you a percentage of what they value it at.
Often the max percentage (loan to value) is 90%, but it looks like there are a few lenders who will lend 95% or maybe even 100% - but interest rates will probably be higher.
No mortgage lenders will lend you more than 100% of their valuation (even if you say you intend to use the money to renovate.)
So as an example:
- You offer £400k for a house
- The mortgage lender values it at £390k
- Their max ltv (percentage they will lend) is 90%
So they will lend you up to 90% of £390k = £351k
(In theory, you could remortgage after you've done the work - but in reality, people are normally disappointed with the valuation after doing work.
i.e. You spend £40k on the house, but the mortgage lender still values it at £390k.)0
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