How to fund renovations if buying a dated house

khanji17

We are looking at properties, wondering what ways can we fund renovations if we go for a dated house which needs £20 to 30k spent on it to modernise. 
Can this be added onto the mortgage?

moneysavinghero

You will need to have the 20k-30k in cash ready to spend. Or renovate slowly and pay out of your income. Unless you want to go for a specialist mortgage but that would push up the mortgage cost.

MoneySeeker1

When I ran out of funds to renovate my dated house I'd bought (and thought I might get age discrimination problems with getting a mortgage I hadnt needed to actually buy the house) - I took out a loan.

So most of the renovation was done from my savings and the last bit that "had to be done NOW" (ie the new kitchen it needed) came from a loan I took out and have intended to repay early when the chance arose all along and I will be doing early repayment at some point as per plan).

FtbDreaming

Mine needs a lot spending on it for a loft conversion. I am planning on doing it majority DIY but still expecting to spend in the region of £10-15000. I don’t have that money. I am hoping to save about £4000 to get started then work more each week to have a weekly budget of £300 to tick over bits and bobs we need each week. It’ll probably be a long slow project but it’s the only way we’ll get what we want without going into debt. 

pinkteapot

You'll only be able to borrow a maximum percentage of the purchase price. You can't borrow against the future value once it's renovated (with normal mortgages anyway - I don't know about specialist products). So you need to have the money in cash, assuming you're borrowing at your max LTV already. If you weren't planning to max out the mortgage then it's a case of putting down less cash up-front and taking a bigger mortgage than you'd planned.

FreeBear

FtbDreaming said: Mine needs a lot spending on it for a loft conversion. I am planning on doing it majority DIY but still expecting to spend in the region of £10-15000.

Don't forget to call in Building Control at regular intervals so that the work can be signed off. Having that bit of paper will save on hassle when you come to sell, and may even mean you can sell for a higher price than similar properties in the area.

AdrianC

khanji17 said:

We are looking at properties, wondering what ways can we fund renovations if we go for a dated house which needs £20 to 30k spent on it to modernise. 
Can this be added onto the mortgage?

Of course it can. You effectively hold back £20-30k of your equity that you would otherwise be putting in, and borrow more.

Assuming, of course, that doesn't put you over the maximum LtV...

FtbDreaming

Thanks freebear.. I’m just looking for an architect and structural engineer now so I can get it all done legit according to building regs. Ive been looking at the drawings on the local planning portal and getting some ideas and contacts off there too. 

With regards to selling and increasing value. Its a council street so it likely has a ceiling value not much more than I paid anyway so I’m doing it with the purpose of making it fit us as a family rather than making it more valuable.