Money for renovations

chocfan

Hi all

I'm planning on ringing my mortgage contact at the bank on Monday but would be interested to hear other people's experiences

We're first time buyers with mortgage approval to buy in Dublin. We've seen a house that we're quite interested in but it would need a bit of work-new kitchen, bathrooms and floors. Structurally, it seems ok but we'd obviously get that checked with engineer etc if we were to go ahead

The asking price (and there's always the chance it will go way over so this may all be for nothing!) is 60k less than what we're approved for our mortgage so I suppose I'm wondering what the chances are that the bank will give us what we need to do it up. We estimate it would be around 25k. From googling, I can see they often give money for things that add value to a property like an extension, attic conversion etc but not sure if they would consider renovations like we're proposing.

The annoying thing is we'd be able to afford the extra payments on the mortgage if they allowed it but wouldn't have the cash sitting there to do the work without it!

Would appreciate if anybody had advice/experience like this. Mortgage is with BOI and we wouldn't be going with anybody else

Thanks!

CIARAN_BOYLE

chocfan wrote: »

Hi all

I'm planning on ringing my mortgage contact at the bank on Monday but would be interested to hear other people's experiences

We're first time buyers with mortgage approval to buy in Dublin. We've seen a house that we're quite interested in but it would need a bit of work-new kitchen, bathrooms and floors. Structurally, it seems ok but we'd obviously get that checked with engineer etc if we were to go ahead

The asking price (and there's always the chance it will go way over so this may all be for nothing!) is 60k less than what we're approved for our mortgage so I suppose I'm wondering what the chances are that the bank will give us what we need to do it up. We estimate it would be around 25k. From googling, I can see they often give money for things that add value to a property like an extension, attic conversion etc but not sure if they would consider renovations like we're proposing.

The annoying thing is we'd be able to afford the extra payments on the mortgage if they allowed it but wouldn't have the cash sitting there to do the work without it!

Would appreciate if anybody had advice/experience like this. Mortgage is with BOI and we wouldn't be going with anybody else

Thanks!

Id say as long the Ltv is below 80% they would be happy to give you more. Unfortunately I do not believe the work you propose will have a significant return in terms of adding value.

Evil-p

We got a mortgage from AIB and a month later borrowed 30k from AIB as a personal loan for house refurbishments. The 2 payments together are still less than our rent. They didn't particularly care we had just drawn down a mortgage, they just wanted to check our ability to repay.

I wouldn't anticipate a problem

drunkmonkey

I'd say your way off on your cost of repairs upgrades not to mention the disturbance involved.
I'd budget closer to 100/150k

Evil-p

drunkmonkey wrote: »

I'd say your way off on your cost of repairs upgrades not to mention the disturbance involved.
I'd budget closer to 100/150k

For a kitchen, bathroom and new flooring? 25k is more than adequate for what the op mentions.

Honestly banks give loans for home improvements all the time. They are generally unsecured loans so whether they add value is irrelevant

drunkmonkey

Evil-p wrote: »

For a kitchen, bathroom and new flooring? 25k is more than adequate for what the op mentions.

Honestly banks give loans for home improvements all the time. They are generally unsecured loans so whether they add value is irrelevant

Kitchen 30k on its own depending, Bathroom 5k, if upgrading hot water tank etc add in another 5k for the bathroom. Floors, depending on quality but again you could be taking 1k to 4K a room.
How's the insulation/heating system there's another 10 to 20k. House probably needs painting if run down another 4k, new windows 4k
It doesn't be long adding up. I'd underestimate at your pearl if budget will be tight once the mortgage kicks in and kids.

athtrasna

Mod note

Please focus on access to finance as per OP rather than the cost of renovations. Thanks

JustLen

drunkmonkey wrote: »

Kitchen 30k on its own depending, Bathroom 5k, if upgrading hot water tank etc add in another 5k for the bathroom. Floors, depending on quality but again you could be taking 1k to 4K a room.
How's the insulation/heating system there's another 10 to 20k. House probably needs painting if run down another 4k, new windows 4k
It doesn't be long adding up. I'd underestimate at your pearl if budget will be tight once the mortgage kicks in and kids.

25k can make a big difference to a typical 3-4 bed once you spend it wisely.

OP, talk to the bank to make sure but there should be no issue with what your looking to do.

Hope it all goes to plan, best of luck!

thierry14

drunkmonkey wrote: »

Kitchen 30k on its own depending, Bathroom 5k, if upgrading hot water tank etc add in another 5k for the bathroom. Floors, depending on quality but again you could be taking 1k to 4K a room.
How's the insulation/heating system there's another 10 to 20k. House probably needs painting if run down another 4k, new windows 4k
It doesn't be long adding up. I'd underestimate at your pearl if budget will be tight once the mortgage kicks in and kids.

Agree it does add up quickly and when you change one thing like the kitchen, suddenly the bathroom doesn't look too good and you do that, then sitting room stands out 😀

Some of your prices look a bit high or maybe not if its Dublin

I have done a lot of work this past month, Midwest small town

New kitchen fitted with appliances for normal 6m x 5m was 12k

Tiles for utility room , kitchen, hallway, toilet downstairs 4K supplied and fitted

Painting interior and exterior ( they will come back in spring to do it, too cold and wet now ) 4K

Insulation cavity pumped, insulated attic, stira, boards down in attic for storage 1.2k ( house was built in 2005, so qualified for grant )

Laminated flooring for 4 beds upstairs and landing, carpet on stairs supplied and fitted ( 1.6k )

New dual heating system, modern condensed boiler 26kw with 94% efficency, multi fuel stove 21kw, new cyclinder, plumbed, fitted supplied 7k

New fencing in garden, extra side gate, 700e

Furniture 2 x leather reclining couches, coffee table 2.5k

New mattress x 2 and bed frame 1.3k

3 x Cupboards and presses for rooms 1.5k

2 x Bathrooms tiled, new showers, bath, sink, toilets etc was 8k for both

Plus few bits here and there another 1-2k

That's around 40k I spent on a 4 bed semi D

In the Midwest so substantially cheaper to buy and labour alot cheaper

drunkmonkey

Yea you could easily blow 50k, 25k won't go far by op's description.
Has to be factored into the price along with having tradesmen in and out of the house the whole time, might seem not so bad at the start but can really drag on.
Started a conversion at home in September, guide was 6 weeks and it's still not finished. Once you start at something god only knows what could pop up you weren't expecting.

Think I'm being jockeyd on my quote for carpeting the landing based on your costs.

athtrasna

Please see mod note above.

chocfan

Thanks for all the comments

It's really more the finance side of things I'm concerned about but it's interesting hearing people's perspectives on the estimate etc

Much appreciated!

CF

CIARAN_BOYLE

chocfan wrote: »

Thanks for all the comments

It's really more the finance side of things I'm concerned about but it's interesting hearing people's perspectives on the estimate etc

Much appreciated!

CF

While I am not able to comment on the estimate, I would expect the bank to want a realistic estimate. After all a house with no bathrooms facilities (because you overspent on the kitchen) would be difficult to sell.

newacc2015

You should only match finance to how long you think you will get from something. So if you are doing a massive extension, get a mortgage. For a kitchen, flooring and bathroom, I would ask for a personal loan. If you get a mortgage and put kitchen on the mortgage, you will be paying off that kitchen for the next 25 years at around 4-5%. It is rather expensive. Where KBC will give you a personal loan ( you dont have to be a customer of the bank) for 6.3% fixed and you pay off the kitchen etc within a 5-7 years.

There is no incentive to get a personal loan from BOI. It is really expensive (7.5%) and there is an early repayment penalty. They may do a discount for you, but Im not sure.

Your local CU might have cheap home improvement rates. So do while others dont

Another option is you take out a variable mortgage from BOI and put your kitchen etc on it. Then aggressively pay off the €25k that you paid for kitchen etc off the mortgage. So you benefit from the cheaper finance of a mortgage.

Is there any reason why you are getting a mortgage from BOI? They are one of the most expensive and quite inflexibly for personal loans compared to AIB or PTSB or KBC ( I wouldnt take a mortgage from KBC due to not passing on variable cuts and being aggressive with arrears customers)

monday monday

I got a mortgage with boi 2 years ago to buy and completely gut and renovate a house. We had no problems at all getting the mortgage.
LTV was 72%. The final drawdown was held back until house was finished signed off and valued. So you need to have money for the final installment yourself.

WheresMyCamera?

chocfan wrote: »

Hi all

I'm planning on ringing my mortgage contact at the bank on Monday but would be interested to hear other people's experiences

We're first time buyers with mortgage approval to buy in Dublin. We've seen a house that we're quite interested in but it would need a bit of work-new kitchen, bathrooms and floors.........................
................The annoying thing is we'd be able to afford the extra payments on the mortgage if they allowed it but wouldn't have the cash sitting there to do the work without it!

Would appreciate if anybody had advice/experience like this. Mortgage is with BOI and we wouldn't be going with anybody else

Thanks!

Would love to hear how you got on with the banks Chocfan. I'm in a very similar position myself only difference is I'm buying solo. A fixer-upper still within my estimated borrowing range would really open up some choices.

chocfan

Thanks again for all the input.

In regards to why we're going with BOI, the main reason is that they're the only ones that will give us a mortgage!! I have a long-standing medical issue which isn't a longterm concern but affects life insurance. I can't be covered for 5 years with any company but BOI were willing to waive that because of a death in service policy with my company. Financially, we're well set which I think helps a lot.

Got on really well with the bank chat on Monday Wheresmycamera. So, monday monday referred to this already and was absolutely correct. They hold off on giving you the full amount for the renovation at the start so you need to source that money elsewhere (e.g. credit union/short term loan with another bank)
Then, once BOI valuer agrees that the house has increased in value by whatever amount you put in, they release the extra funds so you can pay that off.

The risk I suppose is that their valuer mightn't agree with the newer valuation and so they might not give the extra funds so you're under some pressure to pay off the short term loan on top of the new mortgage but we'd be reasonably confident the value would go up.

The other thing is they absolutely release funds for things like kitchen etc, not just for bigger jobs like extensions. If they think it increases in value, then they'll cover it.

We're going to pursue things anyway and put in a bid etc. If (big if!!) we went sale agreed, it would all depend then on the builder/quantity surveyor opinions as to whether or not we would move forward with things. The house isn't actually that old so would be cautiously optimistic it wouldn't need big things like re-wiring, boilers etc. It has been rented out in the recent past hence the main reason why the kitchen etc needs to be done as it really hasn't been minded (and isn't to our taste at all)

Will keep you posted in case others find this information useful

CF