Looking for a mortgage to renovate an old house.

Lemon10

Hi

Myself and my partner are currently renting and we are considering buying an old two bed property that has been on the market for some time and would require renovating but has great potential. Renovation includes rewiring, installing a new heating system, insulating, knocking internal walls, plastering, the list goes on... but luckily we have help on our side to sort a lot of these out.

We have spoken with a few banks and have discussed the possibility of getting a mortgage of €80,000, we have a 12-15% deposit. This is €50,000 for the property and an additional €30,000 which would be drawn down for the renovation. This figure is ballpark and subject to us getting an evaluation from an architect/builder, it could be higher or lower.

I am just wondering what we would be entitled to include in the renovation costs. We obviously need to get the things listed above done first but are we entitled to include any of the following in the estimation. A fitted kitchen, bathroom, tiling, flooring throughout, lighting, doors and skirting, painting internal and external, built in wardrobes, fireplace/wood burning stove and appliances such as cooker, fridge, washing machine etc... Also could we include any work outside in this cost. I may be getting a bit greedy there.

Just wondering what the norm is. Do banks just tend to lend the cost of the house or do they allow for any of the above. If anyone could tell me what we could include that would be great, thanks!

killers1

Lemon10 wrote: »

Hi

Myself and my partner are currently renting and we are considering buying an old two bed property that has been on the market for some time and would require renovating but has great potential. Renovation includes rewiring, installing a new heating system, insulating, knocking internal walls, plastering, the list goes on... but luckily we have help on our side to sort a lot of these out.

We have spoken with a few banks and have discussed the possibility of getting a mortgage of €80,000, we have a 12-15% deposit. This is €50,000 for the property and an additional €30,000 which would be drawn down for the renovation. This figure is ballpark and subject to us getting an evaluation from an architect/builder, it could be higher or lower.

I am just wondering what we would be entitled to include in the renovation costs. We obviously need to get the things listed above done first but are we entitled to include any of the following in the estimation. A fitted kitchen, bathroom, tiling, flooring throughout, lighting, doors and skirting, painting internal and external, built in wardrobes, fireplace/wood burning stove and appliances such as cooker, fridge, washing machine etc... Also could we include any work outside in this cost. I may be getting a bit greedy there.

Just wondering what the norm is. Do banks just tend to lend the cost of the house or do they allow for any of the above. If anyone could tell me what we could include that would be great, thanks!

You can factor all/any of the above into the equation so long as the Bank's Valuer is of the opinion that the value on completion of the works is still within the banks loan to value ratio policy and you qualify for the total amount you need to borrow.

mcghmk

Banks will not include renovation costs in with your mortgage to purchase the property in this current climate. We were looking for it and told that banks just dont do it anymore. Also be aware when buying a property that needs renovation carried out, the bank will want to know where you are getting every cent from, to carry out the work which will be highlighted by the pre purchase survey..e.g you must have the savings in your account or a gift letter from parents stating they will give you x amount of money (money cant be borrowed from another bank or institution). Changed times eh...for the better I suppose. This is only my experience and have recently bought after looking for 2 years. Good luck

Lemon10

Thank you both for your advice.

We have been getting mixed messages from the banks as to whether or not we can borrow to renovate the house. Our own bank (the first we approached) seem to think there’ll be no problem but others have said they wouldn’t lend for the renovations or that we would have to look at getting a refurbishment loan after getting the mortgage.

The house is currently owned by close family so we have discussed the option of them doing a lot of the renovation before selling i.e.: the structural work, plumbing, electrics etc… leaving us to complete the house; fixtures, fittings etc… after purchasing.(at a higher price)

Do you think this would leave us in a better position to secure a mortgage for the house? Can you include the cost of any fixtures and fittings in the mortgage amount or do the likes of flooring, kitchens and bathrooms have to be funded ourselves?

We have just talked about this option and I will be speaking to the banks about it, I’d just like to get other peoples opinions it.

Thanks for your help.

jArgHA

hello, my partner and i are now in a similar position to what you were in Lemon10 in May. How did you get on with the banks since May ? regards