Remortgage Valuation during renovation works...help?!

nicki140

Hi - (my partner needs some advice!)

He is completely renovating a 250 year old granite Cornish cottage. He thought he still had another year left on his fixed mortgage, however transpired it ran out in December!

His mortgage has suddenly jumped up £300 a month (money hes been using to rebuild his house himself, on a budget) hence now him running around trying to remortgage. The mortgage valuer wants to see the inside of the house in a weeks time and house is a complete building site! He's admitted that the house has no kitchen but kept quiet about the rest of it.....

He's knocked down the kitchen and stud walls and started all over. He has spent the last two years shoring up the roof; replacing sewage-pipes; soakaway; repointing the external granite walls/ new windows; underfloor heating installed but its not connected. Wiring has been renewed but not connected.

At this time he is in the process of installing oil tank/water tank etc but still some way off.

The bedrooms and new bathroom have been marked out for when the stud-walls are rebuilt but basically the inside is a shell with all the granite walls exposed.

As he stays there whilst working - he has renovated one of the bedrooms to include an en-suite - electric shower, loo and sink and installed new electric circuit board/electrics. Fully furnished with TV & storage. Lovely room and shows how the house will look.

He has a temporary 'kitchen' which is a table with microwave, fridge & kettle. However there is no kitchen sink - we wash up outside (reminds me of camping but I digress!). Plastic garden table/chairs are the dining/sitting area.

Anyone been in this situation before? I know the valuer is probably going to have a hissy fit but what do they actually need to tick off to make the mortgage company happy? His LTV rate is 72% on the value he paid for 2 years ago.

I suppose you could say it has a bathroom? Ive heard you need to have a kitchen sink? There is an aga in situ but not yet connected. Whilst the underfloor heating is not yet connected, he does use the massive Cornish fireplace (you can stand up inside of it!) to heat the whole house - will this be acceptable for heating?!

Worse case scenario he continues to pay the SVR he is on now and remortgage when house is looking better but he really doesn't want to.....

Any thoughts, that will be great

Kind regard Nicki

Mortgage_Adviser

In this situation taking up the retention product from existing lender would've made the most sense.
The property is usually expected to be in a livable condition.

What is his broker saying?

davidmcn

Is it a standard residential mortgage he's trying to take out? It will need to be in habitable condition - I think the lack of internal walls will be a problem! Yes, kitchen sink will need to be in working order. I don't think the heating is so much of an issue. Not sure whether electrics need to be finally connected or it's sufficient for them to be almost complete.

Did he get consent from the current lender to do this work?

[Deleted User]

Either take a retention deal with existing lender or use a lender that does desktop surveys under 75% ltv

How much was it worth when he bought it? And how much would it sell for in its current state?

These are the questions the valuer will care about

nicki140

Thank you for your replies.

Its a residential mortgage. He bought it for £298000 2 years ago and it was in a very run down state but habitable (just!). I have no idea what it could sell for in its current state but Ive seen empty granite barns for sale on farms for up to £175000?

I cannot find a definitive list of lenders who do desktop surveys. He was hoping the L&C broker would know but then told them he had no kitchen!

Broker did mention retention mortgage but that may have to be plan B...

[Deleted User]

There isn't a definitive list of lenders. There are a few that offer a valuation during the application process and we can choose to accept it or request a physical valuation.

Expect it to be valued in its current state for the remortgage. And there is no way of knowing if the lender will accept the state its in.
Technically there are lenders who's base definition of habitable is 'does it have a flushing toilet and at least cold water'. You won't want their rates though.

May have to go through a few lenders to get one to approve. Perhaps weigh up how much you'll save by moving lenders, against the extra cost of sitting on the current standard variable rate.