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Mortgage including renovation

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  • 22-09-2020 6:16pm
    #1
    HotMama89
    Registered Users Posts: 61 ✭✭


    Equity in current house - 60k
    Cost of new house - 260k
    Approval for 210k

    If I buy the house at 260 and use most of my equity for shortfall 50k. The house potentially needs up to 70k of renovations to bring it up to a 350k house.

    Would the bank lend the money for the renovations also so totally owed 280 on a 350k house?


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    #2
    Smiley11
    Registered Users Posts: 246 ✭✭Smiley11


    We got AIP including 50k towards renovations. This figure would have gone up had we gotten the house for less. Not sure if we'll need it now but they approved it anyway.


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    #3
    HotMama89
    Registered Users Posts: 61 ✭✭HotMama89


    Was the amount including the 50k still below your 3.5 rule?


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    #4
    jlm29
    Registered Users Posts: 3,818 ✭✭✭jlm29


    HotMama89 wrote: »
    Was the amount including the 50k still below your 3.5 rule?

    Regardless of how much the house would be worth at the end, they’ll still look at affordability and the 3.5 * salary rule, they’re central bank rules


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    #5
    Smiley11
    Registered Users Posts: 246 ✭✭Smiley11


    It was. Our broker said there would be no exceptions for a few months but at this rate, I'd imagine it will be the new year & that they won't make it easy. Thats an uneducated guess though!


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    #6
    HotMama89
    Registered Users Posts: 61 ✭✭HotMama89


    Ya Im caught both ways as being a second time buyer I am required to put up 20% deposit as well as 3.5 time rule


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    #7
    Smiley11
    Registered Users Posts: 246 ✭✭Smiley11


    We're the same but have a decent deposit (savings, house sale profit, Covid). At the moment, we can buy well but might need an exception if we find something more costly. Going to try to stick to the 20% deposit because I'd prefer to have lower mortgage repayments.


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