Additional borrowing for home improvements

MNM2903

Hi

I have previously posted about getting a loan for home improvements and recently had a conversation about this at work.

Someone told me today that you can borrow and add this to your mortgage if the value of your property is going to be worth more after the renovations have been done.

My immediate concern is that we only put down 10% on a property were buying for 182k, not sure if this makes a difference but our DIP was for 275k. we have a 4 bed house and others in the area that are decorated to a high standard and 3 bedroom are on the market for anywhere between 215k - 250k.

Is this something our bank would consider? is this the norm? Just looking for advice as we're looking at maybe adding a small extension, needs a new bathroom/kitchen flooring and a rewire. We were looking at getting like a 30k loan to do it all apart from the extension, but we would rather have it as part of the mortgage if we can.

dimbo61

When did you buy the property ?
How much equity is in the house Now.
A rewire and new bathroom, new kitchen flooring will not add much value and may cost More than the value they add to the house.
But you can enjoy the new bathroom and know the electrics are safe.
Adding a new small extension on a 4 bed house could even devalue the property if done badly or not in keeping with the rest of the area.

[Deleted User]

There are some lenders in the specialist lending areas who can lend on the future improved value of the property.
They won't be lenders on the High Street and as far as I can remember you will most likely need 15% deposit to get started.

I'm basic terms, they will lend 85% of current value and have a pot of money equal to 85% of future value. You ca dip in to that pot to do things like double glazing, extensions etc. Each dipping of th pot would most likely require a survey to make sure the value is on track

Its fairly specialised lending so not usually comething you can approach yourself. Generally has to be done through brokers

MNM2903

Were in the process of buying it with an estimated completion date of 15th - 29th September. The extension would be to the back of the property and would only be 3m by 5m approx, it would be to give added room in the kitchen area which is fairly narrow as it it.

In terms of equity I'm basing it on the fact that we have bought a 4 bed house that needs updating in an area where 3 bed properties in the same street are selling or for sale at 215-250k and we will be paying 182k

MNM2903

Deleted_User wrote: »

There are some lenders in the specialist lending areas who can lend on the future improved value of the property.
They won't be lenders on the High Street and as far as I can remember you will most likely need 15% deposit to get started.

I'm basic terms, they will lend 85% of current value and have a pot of money equal to 85% of future value. You ca dip in to that pot to do things like double glazing, extensions etc. Each dipping of th pot would most likely require a survey to make sure the value is on track

Its fairly specialised lending so not usually comething you can approach yourself. Generally has to be done through brokers

Thanks for that, we're just trying to weigh up whether to get a loan add to mortgage or take our time and do it gradually. Obviously the later being the sensible option but we're not the type to sit back and take our time with stuff like this 😁