Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Mortgage to renovate house

Options
  • 25-08-2013 12:08am
    #1
    Marchbride
    Registered Users Posts: 188 ✭✭


    Just wondering if anyone knows anything about applying for mortgage with extra to renovate?? The house is old in need of approx 50 grand worth of work. The asking price is 185000 for house but agent said put in offer for 145-150000 as he can't see it selling for more due to work needed!! Would there be a possibility that the bank would allow extra for renovations?? We were told provisionally we could get 290000 loan so we're way under this if we go ahead with house and renovation. Anyone any experience of this??


Comments

  • Options
    #2
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Not a chance. With mortgages these days you are lucky to get 90% of the purchase price.


  • Options
    #3
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    Marchbride wrote: »
    Just wondering if anyone knows anything about applying for mortgage with extra to renovate?? The house is old in need of approx 50 grand worth of work. The asking price is 185000 for house but agent said put in offer for 145-150000 as he can't see it selling for more due to work needed!! Would there be a possibility that the bank would allow extra for renovations?? We were told provisionally we could get 290000 loan so we're way under this if we go ahead with house and renovation. Anyone any experience of this??

    Yes you should have no problem to borrow to fund renovations, the amount will depend on the value of the property on completion of the works. You need to bring in a builder and get an estimate for the renovations and submit this with your mortgage application. If the purchase price is 145k and renovations are 50k and the value of the property is 195k on completion of the work you should be able to borrow up to 92% of the 195k. If the work includes Structural work you will need an Architect or Engineer to supervise. You will initially be allowed draw down 92% of the purchase price and draw down the extra 50k in stages as the work progresses.


  • Options
    #4
    Marchbride
    Registered Users Posts: 188 ✭✭Marchbride


    Trish56 wrote: »
    Yes you should have no problem to borrow to fund renovations, the amount will depend on the value of the property on completion of the works. You need to bring in a builder and get an estimate for the renovations and submit this with your mortgage application. If the purchase price is 145k and renovations are 50k and the value of the property is 195k on completion of the work you should be able to borrow up to 92% of the 195k. If the work includes Structural work you will need an Architect or Engineer to supervise. You will initially be allowed draw down 92% of the purchase price and draw down the extra 50k in stages as the work progresses.


    Thanks for your responses guys,
    Two completely different opinions there. Trish have you had experience getting this type of mortgage, you really sound like you know what you are talking about. Pete have you been turned down this type of mortgage or what's your own experience of it??
    Thanks again for the replies :)


  • Options
    #5
    Draco
    Subscribers Posts: 1,911 ✭✭✭Draco


    Trish56's post agrees with what I've been told by my bank (TSB) - I was in with them recently asking this very question. The sticking point is the valuation. What they'll be willing to give you is based on their current valuation of the house and what it'll be worth once done up. They'll then be willing to give you up to a 90% mortgage based on the renovated value (they didn't mention getting the mortgage in tranches but that makes sense).


  • Options
    #6
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    Marchbride wrote: »
    Thanks for your responses guys,
    Two completely different opinions there. Trish have you had experience getting this type of mortgage, you really sound like you know what you are talking about. Pete have you been turned down this type of mortgage or what's your own experience of it??
    Thanks again for the replies :)

    Marchbride, I am a Mortgage Broker with over 35 years experience and process this type of mortgage regularly. As I mentioned get costing's for the works proposed and submit to your lender. A valuation will be required by a valuer on the lender's panel and you can borrow up to 92% of the lesser of the cost of the project or valuation on completion.

    PM me if you want any further info.


  • Advertisement
  • Options
    #7
    Corron
    Registered Users Posts: 23 ✭Corron


    I'm in the same position. This week I asked mortgage advisors from 2 banks about how to go about doing this and neither could offer any advise. In fact one told me it would be nicer to buy a nice, new house that was ready to move into - it's also €200k+ more expensive in the area we're looking!


Advertisement