FTB - How to get mortgage on house with unfinished extension?

1stTime4Everything

Hello,

New user and first time poster here looking for some information if possible.

My partner and I have been looking to buy our first property for a number of years now. We have saved hard in order to raise the necessary funds to be able to get the certain things we would both like, i.e. a garage, conservatory etc.

We are in no great rush and see the time passing by as more of an opportunity to save a greater sum of money for when we do find the right place.

We came across a house in the local area that has had a large 2 storey extension recently added to it, along with new roof, UPVC windows, doors, roller garage door, driveway, the works. Outside, the extension is finished apart from the fresh rendering to tie it in with the rest of the house. Inside however is a different story... It still requires electrics, plumbing, stud work, flooring, ceilings, plastering, bathroom, kitchen, the works!

The house is secure and watertight due to all windows, doors and roof being complete but I'm aware mortgage providers will class it as uninhabitable due to no kitchen or bathroom.

We currently have alternative living arrangements and would not need to move into the property until all necessary renovation work was completed. An educated guess from friends/family that the cost to finish the extension to a high standard should be no more than £50,000 - which we have set aside and that the work should take no more than 8-12 weeks. 

I'm aware most if not all mortgage providers refuse to lend against unfinished properties even if the total value is far less than what they would loan us for a 'complete' property.

I've went as far as to drop a note through the letterbox to the current owners who have spoken to me and said they are after a cash buyer as they are unsure if we would qualify for a mortgage - rightly so. 

I know a 'bridging loan' or bridging finance would be suitable for a situation such as this but as we have no home currently to loan/guarantee against, we are not sure we would qualify. 

I'm going to start with my bank and explain the situation.

My question is, are there any other means I'm not thinking of to raise the necessary capital or things I should say to persuade/convince a typical provider to give us a residential mortgage?

Any advice is most welcome, we aren't dead set on the house and if there is no way forward then so be it. But I find learning about the whole process quite interesting.

Many Thanks.

kingstreet

Buildstore or Ecology BS might be useful points of contact.

dimbo61

This could be a total minefield.
How do you price up the cost of the electrical work needed, New kitchen New central heating , New bathrooms etc.
No point asking the bank manager or Uncle Albert even if he was a builder.
Your applying for a residential mortgage and NOT moving into the property.
Surveyor may value the property at ZERO if it doesn't have a working kitchen and bathroom.

[Deleted User]

Rather than starting with your bank and spending an hour there why not start with an experienced broker and spend an hour to get access to all options rather than just one? 

If its classed as non habitable than a standard residential mortgage isnt going to work.  You are likely to need a renovation mortgage with no exit penalties so you can remortgage to the high street as soon as it has enough done to pass the valuation

Thrugelmir

1stTime4Everything said:

Hello,

New user and first time poster here looking for some information if possible.

My partner and I have been looking to buy our first property for a number of years now. We have saved hard in order to raise the necessary funds to be able to get the certain things we would both like, i.e. a garage, conservatory etc.

We are in no great rush and see the time passing by as more of an opportunity to save a greater sum of money for when we do find the right place.

We came across a house in the local area that has had a large 2 storey extension recently added to it, along with new roof, UPVC windows, doors, roller garage door, driveway, the works. Outside, the extension is finished apart from the fresh rendering to tie it in with the rest of the house. Inside however is a different story... It still requires electrics, plumbing, stud work, flooring, ceilings, plastering, bathroom, kitchen, the works!

The house is secure and watertight due to all windows, doors and roof being complete but I'm aware mortgage providers will class it as uninhabitable due to no kitchen or bathroom.

We currently have alternative living arrangements and would not need to move into the property until all necessary renovation work was completed. An educated guess from friends/family that the cost to finish the extension to a high standard should be no more than £50,000 - which we have set aside and that the work should take no more than 8-12 weeks. 

I'm aware most if not all mortgage providers refuse to lend against unfinished properties even if the total value is far less than what they would loan us for a 'complete' property.

I've went as far as to drop a note through the letterbox to the current owners who have spoken to me and said they are after a cash buyer as they are unsure if we would qualify for a mortgage - rightly so. 

I know a 'bridging loan' or bridging finance would be suitable for a situation such as this but as we have no home currently to loan/guarantee against, we are not sure we would qualify. 

I'm going to start with my bank and explain the situation.

My question is, are there any other means I'm not thinking of to raise the necessary capital or things I should say to persuade/convince a typical provider to give us a residential mortgage?

Any advice is most welcome, we aren't dead set on the house and if there is no way forward then so be it. But I find learning about the whole process quite interesting.

Many Thanks.

Are the materials , fittings etc you want in stock. The trades people you need available when required. There's shortages and delays throughout supply chains. A self builder in our road is still waiting for specific kitchen appliances that were ordered over 4 months ago. 

csgohan4

Thrugelmir said:

1stTime4Everything said:

Hello,

New user and first time poster here looking for some information if possible.

My partner and I have been looking to buy our first property for a number of years now. We have saved hard in order to raise the necessary funds to be able to get the certain things we would both like, i.e. a garage, conservatory etc.

We are in no great rush and see the time passing by as more of an opportunity to save a greater sum of money for when we do find the right place.

We came across a house in the local area that has had a large 2 storey extension recently added to it, along with new roof, UPVC windows, doors, roller garage door, driveway, the works. Outside, the extension is finished apart from the fresh rendering to tie it in with the rest of the house. Inside however is a different story... It still requires electrics, plumbing, stud work, flooring, ceilings, plastering, bathroom, kitchen, the works!

The house is secure and watertight due to all windows, doors and roof being complete but I'm aware mortgage providers will class it as uninhabitable due to no kitchen or bathroom.

We currently have alternative living arrangements and would not need to move into the property until all necessary renovation work was completed. An educated guess from friends/family that the cost to finish the extension to a high standard should be no more than £50,000 - which we have set aside and that the work should take no more than 8-12 weeks. 

I'm aware most if not all mortgage providers refuse to lend against unfinished properties even if the total value is far less than what they would loan us for a 'complete' property.

I've went as far as to drop a note through the letterbox to the current owners who have spoken to me and said they are after a cash buyer as they are unsure if we would qualify for a mortgage - rightly so. 

I know a 'bridging loan' or bridging finance would be suitable for a situation such as this but as we have no home currently to loan/guarantee against, we are not sure we would qualify. 

I'm going to start with my bank and explain the situation.

My question is, are there any other means I'm not thinking of to raise the necessary capital or things I should say to persuade/convince a typical provider to give us a residential mortgage?

Any advice is most welcome, we aren't dead set on the house and if there is no way forward then so be it. But I find learning about the whole process quite interesting.

Many Thanks.

Are the materials , fittings etc you want in stock. The trades people you need available when required. There's shortages and delays throughout supply chains. A self builder in our road is still waiting for specific kitchen appliances that were ordered over 4 months ago. 

My plumber to install a small cloakroom bathroom is still busy 3 months on and I am on their waiting list. I have the parts luckily though. 

MWT

The best advice has already been given, go to a broker, and don't waste time trying High St residential lenders just on chance...

1stTime4Everything

kingstreet said:

Buildstore or Ecology BS might be useful points of contact.

Thanks, I'll look into those. 

1stTime4Everything

dimbo61 said:

This could be a total minefield.
How do you price up the cost of the electrical work needed, New kitchen New central heating , New bathrooms etc.
No point asking the bank manager or Uncle Albert even if he was a builder.
Your applying for a residential mortgage and NOT moving into the property.
Surveyor may value the property at ZERO if it doesn't have a working kitchen and bathroom.

Yes - it could. However, as previously mentioned we aren't bashing on regardless but exploring options and at this very early discovering if it is even possible. All estimates for work have been factored in at the top end of the scale so £50,000 is generous - so we are told.

I appreciate without pictures it's difficult to picture what is required. 

1stTime4Everything

Deleted_User said:

Rather than starting with your bank and spending an hour there why not start with an experienced broker and spend an hour to get access to all options rather than just one? 

If its classed as non habitable than a standard residential mortgage isnt going to work.  You are likely to need a renovation mortgage with no exit penalties so you can remortgage to the high street as soon as it has enough done to pass the valuation

Whilst waiting for replies I started with my bank anyway. They were quite helpful and as they couldn't define what constituted a 'working kitchen', they would be happy to send a valuer round to inspect the property and go from there.

I stressed that the current owners are still living in the property, and therefore the new bathroom suite they have purchased is plumbed in for use, albeit without tiling etc and that they have some basic kitchen appliances.

Thanks for the information on reno mortgage. That was my intention, to switch to a residential mortgage on completion of any work. 

1stTime4Everything

Thrugelmir said:

Are the materials , fittings etc you want in stock. The trades people you need available when required. There's shortages and delays throughout supply chains. A self builder in our road is still waiting for specific kitchen appliances that were ordered over 4 months ago. 

We are nowhere near that stage yet. Just gathering information on how we could finance the property to get the ball rolling. I'm aware there are major delays but we would be in no rush to move in.