Lower Mortgage Amount for Do Er Upper?

DonnieCorko

Hi,

I am looking for some clarification on this.

If I have mortgage approval for 400K and a deposit of 50k, I can purchase a house for 450k.

However, if I want to purchase a do-er upper that is on the market for 370k, I will need roughly a 40k deposit. Therefore, the mortgage amount is 330k, which means by total purchasing power is 330k+40k deposit+10k remainder. Is that correct?

Or can I still get a 400k mortgage?

Thanks

Buddy Bubs

If the house is on the market for 370k you can't get a 400k mortgage. Max is 90% for first time buyers. 400k would be like 110% or thereabouts. 330k sounds right there.

Is that what you're asking?

Or are you asking if a bank will lend less on a house that needs work ?

And what is the 10k in your 330+40+10? I don't know where that 10 appeared from

extra-ordinary_

https://www.boards.ie/discussion/comment/122238368#Comment_122238368

10k/13k is left out of OPs 50k savings after paying 37k deposit on a 370k house. Yes, I think you can keep that 13k for doing the work on the house, although whoever is giving you the mortgage will confirm.

You won't get a 400k mortgage for a house valued at 370k as already said 90% of purchase price mortgage is most you can apply for.

mulbot

You'll only need the 37k,the rest of your savings are irrelevant, unless you want to put 50 grand down and take slightly smaller mortgage.

DonnieCorko

https://www.boards.ie/discussion/comment/122238368#Comment_122238368

As the poster said below, the 10/13k is the remainder.

I thought you could get a mortgage though that included funds for renovations? Is that not the case?

DonnieCorko

From what I read elsewhere, you can borrow 90% of the house, and 90% of the renovations (presumably up to your max mortgage amount - in my case 400k).

If so, I could borrow 343k for the house (+37k of my deposit = 370k - the base house cost), plus another 57k (343k house borrowings + 57k renovation borrowings = my 400k max loan amount allowed).

Is this correct?

extra-ordinary_

https://www.boards.ie/discussion/comment/122239431#Comment_122239431

From what I read elsewhere, you can borrow 90% of the house, and 90% of the renovations (presumably up to your max mortgage amount - in my case 400k).

Have you a link? The bank are gong to lend you more than the asset is currently worth? Where is their security?

DonnieCorko

https://www.boards.ie/discussion/comment/122239541#Comment_122239541

https://mortgage123.ie/house-renovations/

House must be worth extra equivalent to the borrowings.

extra-ordinary_

https://www.boards.ie/discussion/comment/122239624#Comment_122239624

Ah yes, OK. The lender will lend you 90% of the asset and once you increase the value of the asset through renovations etc they will re-evaluate the asset and offer you 90% of the difference in the two values. So for your 370k house purchase, you'll have 13k to renovate.