Budget Quotation for Mortgage Approval

cobrakev

Hi,

I have recently gone sale agreed on a two storey, 3 bed semi detached house in Dublin. I intend to do fairly significant extension and renovation works on the house and am looking to use part of the mortgage to fund this.

In order to proceed and get final mortgage approval for purchase of the house and renovations the bank have requested costs for the proposed renovation works. Naturally I don't have the full detailed design and tenders complete yet but I do have reasonable drawings and description of the works required. Would most contractors be able to provide an estimate for the works for the purpose of mortgage approval? I am looking to do this ASAP as the bank have requested this at very late notice and the vendor is keen to progress. Can anyone advise on contractors who could provide this service in relatively quick time?

Thanks,
Kev

wirehairmax

No bother if you're going to pay for it. €300 and I'll have it for you next week

cobrakev

Don't most reputable contractors quote FOC in the anticipation of procuring the work? I'm a project engineer and would never tender to a contractor who wants to be paid to bid for a project. I'll keep my €300 and get someone familiar with the process of bidding for services, thanks.

BryanF

cobrakev wrote: »

Don't most reputable contractors quote FOC in the anticipation of procuring the work? I'm a project engineer and would never tender to a contractor who wants to be paid to bid for a project. I'll keep my ?300 and get someone familiar with the process of bidding for services, thanks.

A qs?

wirehairmax

Sure go right ahead and waste peoples time. Get a QS to do a budget proposal and dont be so tight.

jmBuildExt

I paid a QS €400 for same not so long ago.
The bank will probably want your architect or engineer to sign off on the costings too (the 2 banks i was dealing with did)

cobrakev

Maybe my original post was unclear but the bank want 'an estimate of cost of the proposed works from a contractor'. I'm only at Sale Agreed stage so it's far too soon to be paying a QS to do up a detailed budget or BOQ. That's further down the line when I get to detailed design and tender stage. Now I just require a builder to estimate the cost of extension and renovation works based on initial draft drawings.

It's not about being tight, but surely I'd be crazy to pay a QS now if I can get whats needed from a contractor. Especially since I will have to pay the QS again to come back at the detailed design stage to do up the full BOQ. I'm conscious enough not to spend thousands on services/fees for a house for which I have not yet signed the contracts.

wirehairmax

Sher how does €500,000 sound? Put that on a piece of paper and go away to your bank with it and you've wasted nobodys time and it cost nothing.

jmBuildExt

He has a point
I would have thought a bank wouldn't accept a figure without having someone's name put to it. Id to provide copy of my architects Professional indemnity insurance.

If its any use...
I got approval for the purchase price first. Then signed the contracts. Then once the contracts were signed I spent money on architects etc and QS and got approval for a new mortgage which included works.
However, I was in a position where I knew the sale would take a while to complete from the vendor's side.

T-Maxx

You need to discuss your situation with the bank. They are very rigid so there's really no point in giving them anything else than what they want.

cobrakev

Not sure what your problem is wirehairmax. The bank have requested an estimate/quote from a contractor so that's what I'm looking for at this stage and nothing more. Not sure how you can't understand that fairly basic point. If they asked for a QS/Architect/Engineer to verify then I'd happily pay for the services to get it done, completely pointless to do so otherwise however.

jmBuildExt - Thanks for the advice. Basically we had provisional mortgage approval for more than the full amount needed for the house. Now it's just a case that we are looking to use the additional amount that was approved for the renovation works. So the bank want an idea of how much the renovation work will cost. Naturally at this stage they accept that it's impossible prior to sale to have full design, tender, final costs etc.

wirehairmax

cobrakev wrote: »

Not sure what your problem is wirehairmax. The bank have requested an estimate/quote from a contractor so that's what I'm looking for at this stage and nothing more. Not sure how you can't understand that fairly basic point. If they asked for a QS/Architect/Engineer to verify then I'd happily pay for the services to get it done, completely pointless to do so otherwise however.

jmBuildExt - Thanks for the advice. Basically we had provisional mortgage approval for more than the full amount needed for the house. Now it's just a case that we are looking to use the additional amount that was approved for the renovation works. So the bank want an idea of how much the renovation work will cost. Naturally at this stage they accept that it's impossible prior to sale to have full design, tender, final costs etc.

So you'd pay a QS to do it but you wouldn't pay a contractor? Does a contractor not have bills and wages to pay also? It takes time and money to price jobs, believe it or not. Most building contractors would have a QS working for them or on contract and they would be working on tenders and valuations.
You are not currently tendering either despite what you say. You may find some fool to do it for you but the majority wouldn't. Unless lets say, you paid a €500 deposit to be refunded when the job actually starts?

Gumbo

What bank are you dealing with?
Have they given you the budget costing form yet?

Most require PI and it to be costed by an engineer, architect or Surveyor.

Sausage dog

Our experience was a little similar but we bought our house with our own funds & then sought mortgage to renovate & extend. To cut to the point, it was a nightmare. Once we got approval we then had to work out stage payments. Finding wording they agreed with and could work with seemed impossible. It might be fine for a new build but renovating & extending seemed like an alien concept & their computer programme didn't seem to understand. We found it very difficult to fit our work into their forms. If it hadn't been for our own funds we wudn't have been able to keep the project moving. So a word of warning.....be prepared for many delays along the way even once you have approval. Good luck.

cobrakev

wirehairmax wrote: »

So you'd pay a QS to do it but you wouldn't pay a contractor? Does a contractor not have bills and wages to pay also? It takes time and money to price jobs, believe it or not. Most building contractors would have a QS working for them or on contract and they would be working on tenders and valuations.
You are not currently tendering either despite what you say. You may find some fool to do it for you but the majority wouldn't. Unless lets say, you paid a €500 deposit to be refunded when the job actually starts?

I'd pay a QS to do up a detailed budget/bill of quantities at detailed design stage for the tender package. I wouldn't pay a contractor for an estimated cost or even for a bid at the full tender stage. The contractors incentive to provide a budget for any project is the prospect of securing the work, this is how they cover their bills and wages, not by charging potential clients for providing quotes.

You don't seem to be aware that contractors rarely charge for providing an estimate or quote. I have contacted 4 contractors today and sent them the drawings and details. All 4 have stated that they will have estimates to me early/mid next week at no charge. Shock horror! ;P

cobrakev

Sausage dog wrote: »

Our experience was a little similar but we bought our house with our own funds & then sought mortgage to renovate & extend. To cut to the point, it was a nightmare. Once we got approval we then had to work out stage payments. Finding wording they agreed with and could work with seemed impossible. It might be fine for a new build but renovating & extending seemed like an alien concept & their computer programme didn't seem to understand. We found it very difficult to fit our work into their forms. If it hadn't been for our own funds we wudn't have been able to keep the project moving. So a word of warning.....be prepared for many delays along the way even once you have approval. Good luck.

Thanks, I appreciate the feedback. Yes, I have been informed that the staged payments can be a bit of a nightmare but unfortunately we don't have enough funds to do all of the work ourselves so we need the mortgage to cover 50% of it. We will just have to do our best and hope that there is no show stoppers.

Sausage dog

Just to add....our bank initially wanted the final stage payment to be more than 10% of the mortgage loan amount, but then just before the final approval they changed this to more than 10% of the entire renovation cost. A considerable difference considering the mortgage was less than 50% of the renovation cost.

irishbuzz

Hi Sausage dog, can I ask which bank you were with and what was the actual payment breakdown in the end (stage + percentage)?

Sausage dog

Hi Irishbuzz, our bank was PTSB. I'll have to look up the stage payments.