Renovation mortgage

Sf2017

Hi,
I'm just enquiring about the process in regards to buying an old cottage with the hope of building a house onto it. Would this be two mortgages as in purchase the cottage and then a separate mortgage for the new build ? Or would it be one mortgage which would require approved planning for the cottage at the initial stage ? As planning takes in excess of three months the cottage we are looking at may be sold at this stage . Would anyone know what the normal process for this would be ? Thanks

Gumbo

Could be mortgage based on final value.
Is the current cottage habitable? As if it's not, you may not get a mortgage on it.

You. We'd to have your planning in place before they lend for construction.

mike_2009

I'd check with the local planners to see what they think - if any restrictions would apply (type of house, max height/size, materials, style, local needs etc). Next would be to approach the owner and setup a conveyance subject to planning permission (i.e. a contract where you agree the purchase if you get planning but you're not forced to buy if you don't). Ideally this would be for 12 months as you may not get planning first time, there may be requests for information, objections or worst base Bord Pleanala gets involved but hopefully not. What's against you in terms of time is getting the detailed drawings ready for planning which is where I prefer to spend more time and not rush but it can be done, it's just once the planning submission is made you're not going to want to revisit / reopen the design to make changes afterwards....you could get approval in principal for a mortgage but you're going to need to work out how much the land clearance and build will be and have enough to cover development costs and the land itself. This would be like buying a empty site and self building form the Bank's point of view but you've the extra overhead of clearing the site and the risk of issues with old septic tank, drainage, soil type etc which can affect foundations and your budget ultimately. Getting a proper survey and soil analysis (for drainage/foundation reasons) would be in my mind first up.....a bit of derisking on your part....and check land registry matches site as advertised & owner details, watch out for right of way, access covenants / freehold issues. Identify service locations via requests to councils, ESB etc.
A quantity surveyor can help get a good estimate of costs for this whole enterprise once you have a design in mind. The issue might be the Bank's valuation, this could limit the size of mortgage you can access (3.5 x salary max normally but if the the final valuation / market value is less, you only get 90% of the lower value!). See if you can afford to finish the build. Of course you can do a lot yourself so there is leeway.....
Anyway, that's how I'm imagine it would go. You can always ring up the estate agent to sound things out.....
Note: If in doubt about the budget, timelines and before signing anything, be fully prepared to walk away. You could get sucked into a money pit here if you're not vigilant while trying to build your dream home....I hope you pull it off though! Best of luck.

Sf2017

mike_2009 wrote: »

I'd check with the local planners to see what they think - if any restrictions would apply (type of house, max height/size, materials, style, local needs etc). Next would be to approach the owner and setup a conveyance subject to planning permission (i.e. a contract where you agree the purchase if you get planning but you're not forced to buy if you don't). Ideally this would be for 12 months as you may not get planning first time, there may be requests for information, objections or worst base Bord Pleanala gets involved but hopefully not. What's against you in terms of time is getting the detailed drawings ready for planning which is where I prefer to spend more time and not rush but it can be done, it's just once the planning submission is made you're not going to want to revisit / reopen the design to make changes afterwards....you could get approval in principal for a mortgage but you're going to need to work out how much the land clearance and build will be and have enough to cover development costs and the land itself. This would be like buying a empty site and self building form the Bank's point of view but you've the extra overhead of clearing the site and the risk of issues with old septic tank, drainage, soil type etc which can affect foundations and your budget ultimately. Getting a proper survey and soil analysis (for drainage/foundation reasons) would be in my mind first up.....a bit of derisking on your part....and check land registry matches site as advertised & owner details, watch out for right of way, access covenants / freehold issues. Identify service locations via requests to councils, ESB etc.
A quantity surveyor can help get a good estimate of costs for this whole enterprise once you have a design in mind. The issue might be the Bank's valuation, this could limit the size of mortgage you can access (3.5 x salary max normally but if the the final valuation / market value is less, you only get 90% of the lower value!). See if you can afford to finish the build. Of course you can do a lot yourself so there is leeway.....
Anyway, that's how I'm imagine it would go. You can always ring up the estate agent to sound things out.....
Note: If in doubt about the budget, timelines and before signing anything, be fully prepared to walk away. You could get sucked into a money pit here if you're not vigilant while trying to build your dream home....I hope you pull it off though! Best of luck.

Thanks so much very informative