Mortgage with higher value due to renovation or necessary things to fix

Luke451

Hi,

I wonder if I can take a mortgage adding up a 10% to renovate or put the house in safety, this safety would be more my personal choice, I'm not talking about the structure safety for example, things like a gate or put a wall where currently people could park on my land and I'd be liable for anything that happens on it.

The amount would be the 10% of 200-220k mortgage, excluding deposit obviously.

I've seen that I could remortgage and get the money in that way, but I wonder if this option is available right on the moment I apply for the mortgage, because if I remortgage, it's gonna be after 5y minimum, I can't remortgage a fixed mortgage unless I lose my job or I get some critical life changing event (as far as I know).

I wouldn't like to wait minimum 5y to get what I need/want from my first home.

Strummer22

The way to do this at the point that you get the mortgage is (assuming you can afford it), don't put all your spare cash into the deposit. 

E.g. if you are buying a house at £250k with a £50k deposit, you could get a £200k mortgage and have no cash, OR get a £220k mortgage and use the £20k difference for your renovations.

Be aware that a smaller deposit might put you in a higher LTV bracket with a higher interest rate.

I'm not sure if this is what you were suggesting, but you can't borrow the money against a potential future increase in value based on your proposed improvements. The house will be valued in its current condition and the mortgage offer based on that.