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Can I ask credit union for a loan for renovation costs after getting a mortgage?

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  • 24-06-2014 9:58am
    #1
    Jamerican
    Registered Users Posts: 98 ✭✭


    Hi all, we're saving to buy a home in the future and one has popped up that is growing on me. Don't think it would work, but have a few questions wondering if it could.

    Have some money in savings and have been saving on average €800 a month to the credit union not including €600 rent per month. 3 dependents and no loans.

    In regards to a mortgage, been told that we can't get a higher loan because of salary. Found a house that needs a lot of work, but is lovely. IF we wanted to go for it, we would be covered for only the asking price not the renovation (no extensions or anything). Could we possibly buy the house and then ask the credit union for a loan? Seeing as we have been saving regularly and they would have a record, it seems they may be the best option. (Note, I have viewed the house but have not had a builder look at the house. At a guess €30K in work... that is from my extensive experience of watching homes under the hammer a couple times.) Anyway to get the reno cost or would it have to be included in the loan? Would it even be possible to get a second loan after just getting a mortgage?

    And lastly, what does a mortgageable house mean? The house has damp and single glazing windows, but seems ok from a glance (yeah... I know... have it checked). Is there a checklist to see if this or any home would meet the mortgageable requirement?


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    #2
    Dr Strange
    Registered Users Posts: 3,427 ✭✭✭Dr Strange


    Jamerican wrote: »
    ... (Note, I have viewed the house but have not had a builder look at the house. At a guess €30K in work... that is from my extensive experience of watching homes under the hammer a couple times.) ...
    I can't answer your original question but would strongly advise to get a viewing with a trusted architect or someone who would know about the costs. We always get our architect out at the second viewing of any property we like and know roughly what the approximate renovation costs are (the full structural survey after going sale agreed may change the costs again, usually upwards but at least you have a ballpark figure to play with).


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    #3
    Jamerican
    Registered Users Posts: 98 ✭✭Jamerican


    Preusse wrote: »
    I can't answer your original question but would strongly advise to get a viewing with a trusted architect or someone who would know about the costs. We always get our architect out at the second viewing of any property we like and know roughly what the approximate renovation costs are (the full structural survey after going sale agreed may change the costs again, usually upwards but at least you have a ballpark figure to play with).

    You're absolutely right. We're pretty uninformed, but we know check the hell out of a house before buying, thanks homes under the hammer, lol! I'm tempted to go back with a builder/surveyor but it would be in vain if we couldn't even get a loan to fix it afterwards. Plus the house is old and since it hasn't been sold yet at the reasonable asking price makes me wonder what the hell is going on under the hood. Auctioneer said over a month ago there were already two offers in and he was only leaving it up for a couple more weeks, but the ad has been relisted last week. hmmm.


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    #4
    Dr Strange
    Registered Users Posts: 3,427 ✭✭✭Dr Strange


    Jamerican wrote: »
    You're absolutely right. We're pretty uninformed, but we know check the hell out of a house before buying, thanks homes under the hammer, lol! I'm tempted to go back with a builder/surveyor but it would be in vain if we couldn't even get a loan to fix it afterwards. Plus the house is old and since it hasn't been sold yet at the reasonable asking price makes me wonder what the hell is going on under the hood. Auctioneer said over a month ago there were already two offers in and he was only leaving it up for a couple more weeks, but the ad has been relisted last week. hmmm.

    Yes, if you suspect there is already something going on then I would definitely spend a small amount to go with someone who knows what to look out for from a professional point of view. It'll save you money in the long run and if your surveyor/builder/architect should bring something to your attention that requires maybe more money than you could get/are willing to put into you can then walk away and concentrate looking at other properties.


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    #5
    Fozzie Bear
    Registered Users Posts: 1,178 ✭✭✭Fozzie Bear


    We are in a similar sort of situation OP in that we are currently buying a house that needs works done. However we are able to get a mortgage to cover purchase and renovation work thankfully.

    Like you I thought I had a rough idea of what it might cost to fix up the house. Boy was I wrong so the first thing you should do is get someone to look at the property and give you an estimate. There are things you will not have even considered that will need doing. My engineer found things that I would not have seen if I were staring at it for a month let alone thought of them. Sewerage system, windows, insulation, moisture levels, services, roof, floors, radon barrier, plaster work, doors, sanitary ware, plumbing, electrics, facia & sofit, leaks, damp patches, land scaping to name just a few of the more obvious ones. There could be planning issues too. It adds up really quickly and in my case was more than double what I had thought it would be.

    Secondly do you really want to get another loan on top of a mortgage? There is a reason the bank will not give you a larger mortgage, because you will have trouble paying it back. I'd be thinking you need to talk to an independent advisor about this. Its easy to get emotionally attached and convince yourself you can make the repayments etc for two loans (if you get them). You need to stay detached and keep a cool head here. There are too many people out there today in serious financial trouble because they over stretched themselves in the Celtic tiger era. You don't want to join that club believe me.

    How bad/good is the house? I'd have my doubts that the bank will give you a mortgage for a house thats not in a current habitable state or have a cert of compliance. Plus when the bank has it valued it should be pretty clear to them there are issues.

    A mortgage broker will be able to set you straight on all this so I'd be talking to one asap.


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    #6
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,712 Mod ✭✭✭✭Henry Ford III


    Jamerican wrote: »
    ....In regards to a mortgage, been told that we can't get a higher loan because of salary.....

    In the circumstances borrowing any more might not be such a good idea?


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    #7
    Balmed Out
    Registered Users Posts: 4,716 ✭✭✭Balmed Out


    Get someone to cost it who knows what their doing. Im looking at a house at the moment that has the worlds smallest kitchen, to move kitchen to another room with associated electric and plumbing and a middle of road quality kitchen, merge two rooms, replace most windows and a few other small jobs its coming to the best part of 60k.
    What im going to do is be prepared to bid what I would be happy to pay for the end result - 65k. You dont have to offer asking price.


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