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Applying for mortgage with home improvements

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  • 06-10-2013 11:37am
    #1
    misshoney
    Registered Users Posts: 38 ✭


    Can anyone enlighten me as to what the story is with getting a mortgage where you want say, 120k for a house and another 100k for home improvements. Looking for information like:

    Is it harder to be approved for this?
    and
    would the 100k be included in the mortgage or would it be a separate loan?


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    #2
    dumbyearbook
    Registered Users Posts: 842 ✭✭✭dumbyearbook


    They don't lend for development of the property you need to have it yourself.

    I am 99% sure that is the full story i'm sure someone can add more detail if needed.


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


    My understanding is that they will lend you money so long as you're actually adding value. I.e. up to 92% of the value of the finished product, and that you'll have to use your savings first for renovations, and the draw down the mortgage. Someone else on here will know more!


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    #4
    miezekatze
    Registered Users Posts: 1,341 ✭✭✭miezekatze


    We went to a mortgage information thing in AIB about 6 months ago and they were saying that they were aware that a lot of properties on the market need some work and they would be willing to lend for renovations. I have no experience with this myself though. I heard that you only get a small percentage of the money up front though and the rest upon completion after another valuation.. that seems a bit pointless though tbh.


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    #5
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    You can borrow up to 90% of value in repair - if structural work will need qualified Architect/Engineer to supervise the work who will certify stage payments. You will also need to submit detailed costings of proposed work.
    misshoney wrote: »
    Can anyone enlighten me as to what the story is with getting a mortgage where you want say, 120k for a house and another 100k for home improvements. Looking for information like:

    Is it harder to be approved for this?
    and
    would the 100k be included in the mortgage or would it be a separate loan?


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    #6
    dumbyearbook
    Registered Users Posts: 842 ✭✭✭dumbyearbook


    Trish56 wrote: »
    You can borrow up to 90% of value in repair - if structural work will need qualified Architect/Engineer to supervise the work who will certify stage payments. You will also need to submit detailed costings of proposed work.

    So if price the is 100K you can borrow 90K?....how do you pay for the house?


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    #7
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    I did mention 90% of the value in repair.... if the purchase price is 120k and home improvements are 100k = 220k in total. A valuer on the lenders panel will carry out a valuation on the property and will be given costings and details of the proposed works if value in repair is 220k you can borrow 90% = 198k, if valued at 200k in repair you can borrow 180k ..
    You can drawdown 90% of purchase price to buy = 135k. Home improvements can be drawn down in tranches and must be certified by supervised architect/engineer.

    All lenders differ how they treat Home Improvements - AIB will lend up to 92% to purchase the property however they will only lend 75% of the proposed home improvements - example - Purchase price = 150k plus home improvements = 40k - Total = 190k - Loan amount = 168k - Will issue 128k to purchase and balance to be drawn down in stages.

    dumbyearbook wrote: »
    So if price the is 100K you can borrow 90K?....how do you pay for the house?


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    #8
    dumbyearbook
    Registered Users Posts: 842 ✭✭✭dumbyearbook


    Trish56 wrote: »
    I did mention 90% of the value in repair.... if the purchase price is 120k and home improvements are 100k = 220k in total. A valuer on the lenders panel will carry out a valuation on the property and will be given costings and details of the proposed works if value in repair is 220k you can borrow 90% = 198k, if valued at 200k in repair you can borrow 180k ..
    You can drawdown 90% of purchase price to buy = 135k. Home improvements can be drawn down in tranches and must be certified by supervised architect/engineer.

    All lenders differ how they treat Home Improvements - AIB will lend up to 92% to purchase the property however they will only lend 75% of the proposed home improvements - example - Purchase price = 150k plus home improvements = 40k - Total = 190k - Loan amount = 168k - Will issue 128k to purchase and balance to be drawn down in stages.

    Thanks for all the info thats way better than I'd expected.


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