First time buyer - mortgage + renovation advice please

kmoss1991

Hi

First post so please be kind!
Myself and my husband are first time buyers and have seen a property we really like. It's on the market for £169,000 but we have been advised that a cheeky offer would be accepted.

We have decided to offer £155,000 (we know the likelihood of this being accepted is low but stay with me). We would like to complete some renovations on the property, i.e. installing an en-suite, a new bathroom suite, knocking down a wall etc. We have a mortgage in principle of £190,000 based on a 10,000 deposit.

Would it be possible to put down the £10,000 deposit, borrow the full £155,000 and use £10,000 for renovations? Based on the house being worth £169,000.

I'm so sorry if I sound like an idiot, I could really do with some advice

Thank you!
Kirstie

MovingForwards

Don't think you can get 100% mortgages anymore as that is what you are trying to do.

So no, you can't borrow the £155k and keep your £10k for renovations.

dimbo61

You will pay a much higher interest rate at 95% LTV so better if you can to pay 10% deposit.

Cakeguts

No you can't do this. You have to pay for the renovations out of savings.

kmoss1991

We thought this may be the case but had read that you can borrow more than the purchase price if it add value to the house and as we are borrowing less than the house is worth, we were hoping it would be possible.

Thanks for the quick responses, I appreciate it.

letitbe90

kmoss1991 wrote: »

We thought this may be the case but had read that you can borrow more than the purchase price if it add value to the house and as we are borrowing less than the house is worth, we were hoping it would be possible.

Thanks for the quick responses, I appreciate it.

House price isn’t worth £169k just because it’s on the market for that.

As far as the lender is concerned, the value will be the lower of their valuation vs your accepted offer.

If you offer 155k and they value it at 160k, they will lend you on the basis of 155k and at no more than 95% of LTV.

Similarly if they valued it at 150k, you’d only be entitled up to 95% of 150k as a mortgage.