Purchase Price v Renovation Cost: Mortage Question

jArgHA

I just have a general question on mortages when renovations are involved / required on a property, apologies if this has been asked umpteen times before or is a silly question:

If the sale price of a house is, say, 120K, but what you envisage the house could be is going to take another eg. 100K in renovations, can the mortgage amount from the bank exceed the sale price to cover some of the cost of renovations?

In our case, we have fairly decent savings to go towards renovations, but it may not be enough, and I am wondering if the mortgage amount from the bank always stops at a maximum of eg. 92% of sale price of house, or if it can go beyond that to help with renovations required (where bank releases additional chunks after proof provided of various stages of the rebuild) ?

Thanks in advance for any tips received!

Citizenpain

banks will lend towards renovations /extensions as part of the mortgage -- not always at 90% or 92% though.

Also AIB will expect you to put your own savings in up front towards the house purchase

J82

jArgHA wrote: »

I just have a general question on mortages when renovations are involved / required on a property, apologies if this has been asked umpteen times before or is a silly question:

If the sale price of a house is, say, 120K, but what you envisage the house could be is going to take another eg. 100K in renovations, can the mortgage amount from the bank exceed the sale price to cover some of the cost of renovations?

In our case, we have fairly decent savings to go towards renovations, but it may not be enough, and I am wondering if the mortgage amount from the bank always stops at a maximum of eg. 92% of sale price of house, or if it can go beyond that to help with renovations required (where bank releases additional chunks after proof provided of various stages of the rebuild) ?

Thanks in advance for any tips received!

I under stand banks will lend for renovation.

Have you any idea how an improved loan-to-value ratio could be an advantage to yoy- if any??

Trish56

Yes you can borrow to fund renovations how much you can borrow depends on the lender... AIB will lend up to 92% but with all lenders amount you can borrow is subject to the lesser of cost or valuation on completion. Example if purchase price is 120k and renovations are 100k in order to qualify for a 92% mortgage of total cost the value on completion must be at least 220k.

Your savings must be used first before you can draw stage payments and if there is structural work it must be supervised by a qualified Architect/Engineer who will certify stage payments as the work progresses.

jonnybravo

Just to note that we had non structural work (windows, replacing oil with gas, cosmetics like new kitchen etc.) and AIB were insisting on getting a qualified Architect / Engineer to sign off on the work. Ended up reducing the amount of our deposit and paying from a mixture of savings and loan from family as it wasn't worth paying someone for the level of work we were doing.

Corron

jArgHA wrote: »

I just have a general question on mortages when renovations are involved / required on a property, apologies if this has been asked umpteen times before or is a silly question:

If the sale price of a house is, say, 120K, but what you envisage the house could be is going to take another eg. 100K in renovations, can the mortgage amount from the bank exceed the sale price to cover some of the cost of renovations?

In our case, we have fairly decent savings to go towards renovations, but it may not be enough, and I am wondering if the mortgage amount from the bank always stops at a maximum of eg. 92% of sale price of house, or if it can go beyond that to help with renovations required (where bank releases additional chunks after proof provided of various stages of the rebuild) ?

Thanks in advance for any tips received!

Trying to do something similar at the moment. Getting positive feedback from AIB that this is possible and negative from BOI (who we bank with).