Mortgage - extra renovation money approved but...

Daragh86

I've a quick question somebody might be able to help me out with.

I've recently got approved for a mortgage on a property that requires renovation. I've been approved for an extra €7700 for the renovation but there is a retention amount of €7700 until the work is complete and inspected by a valuer. My question is how do they expect me to do the work without having the money? I've asked the mortgage provider (EBS) and they said that it cannot be staged and that they have to retain the full amount until the work is complete.

I'll find it very difficult to come up with €7700 to do the work if the payments are not staged, a bit of a ridiculous situation?

Any advice would be greatly appreciated.

crossmolinalad

ha a same problem
gone to the credit union and got the money from them to start
after i was finnished i paid them back

patbrady877

you either have to get a short term loan elsewhere, or get the work done on credit terms. The bank will look to send a valuler out once you have the work done to check the work - however they dont look for reciepts

Daragh86

patbrady877 wrote: »

you either have to get a short term loan elsewhere, or get the work done on credit terms. The bank will look to send a valuler out once you have the work done to check the work - however they dont look for reciepts

thanks for the reply. I'm not very up to speed on this sort of thing. What kind of interest would I pay on a short term loan from say the likes of BOI? Would BOI even consider giving me the short term loan (full time, permanent employement, mortgage is about 30% of net income per month).

Are many building contractors working on credit terms?

This may be a stupid question but to what extent is the work investigated after it is done? For example if I replastered the house would they want to see it just after the plastering work or would it be a problem if I had wall papered over it?

Sorry about all the questions, this side of things I haven't a clue - can't wait to get down to the DIY though! Thanks for your help, it's very much appreciated.

unclebill98

Normally a builder would do the work and then give you a invoice and then you get money from the bank and then pay builder.

Easier said than done in this day and age. Do not rule out not needing to provide invoices for the work carried out, it has been conditions of mortgage top-ups I've seen and its best to have this clarified before carrying out the work.

Also, if the value on completion(a figure you may have come up with) is not what the valuer agrees to you'll not get the extra cash either.

VB1962

Ladies and Gentlemen,

Welcome back to the times of Bridging Loans.

In times past (for a variety of reasons) building societies would sanction loans subject to certain conditions which would have required the borrower to pay for the works independently and upfront before the building society would release funds upon confirmation that the loan conditions were met.

The borrower therefore needed to get a Bridging Loan from his / her bank to pay the builder etc before the building society would release funds and the Bank needed a Solicitor's Undertaking before advancing funds.

Bottom line was that the Bank became the bad guy since they charged short term interest on the Bridging Loan and the customer had to pay more to the Solicitor while the Bulding Society got everything shipshape and were the heroes.

If you can't find a builder who will 'bridge' you the amount then its back to a bridging loan I think.

crossmolinalad

im doing the build and renovation complete by myself
had no money to start with so i took a loan from the credit union
the bank would pay me in 4 statements 3 of them has to be signed of by my architect and the 4th one by the architect and an auctioneer
when i got my first one i paid a bit off to the creditunion
so will i do with the other ones
my sollicitor have nothing to do with my credit union loan so i have nothing extra to pay to her

unclebill98

Well I've not heard that word in ages..... Bridging Loan..... I hope people are reading for the massive amount of interest charged.