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borrowing for renovations (new mortgage drawdown)

  • 24-07-2019 3:38pm
    #1
    realmoonunit
    Registered Users Posts: 86 ✭✭


    If anyone has experience in this area I would love to hear your thoughts / experiences.

    We are at contract stage on a purchase, we have our loan pack with solicitor. The property we are buying is perfectly livable bar a few small (not big cost) items. We want to carry out some renovations / changes to layout. We want to secure finance to do this (home improvement loan). We think we should be ok with about 40k of a loan to facilitate the above.

    But the question is of timing. When would you apply for the loan, I doubt it will be before draw down of mortgage or is it a case once we have loan packs that we can just rock on and get some new loan started when ever we want?

    Cheers

    Mods, if not the appropriate place please move to relevant forum. Tnks


Comments

  • #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,735 Mod ✭✭✭✭Henry Ford III


    Would you be approved for a €40k higher mortgage right now? If so include it and pay it back quickly (variable rate).

    If not is there a danger of potential over borrowing?


  • #3
    realmoonunit
    Registered Users Posts: 86 ✭✭realmoonunit


    Henry Ford III wrote: »
    Would you be approved for a €40k higher mortgage right now? If so include it and pay it back quickly (variable rate).

    If not is there a danger of potential over borrowing?

    Yes, we were approved for much more than we are taking. We are borrowing 80% of the property value. The loan packs are already issued and we are under serious time constraints so going back now would scupper that.

    We have a tracker ported and a smaller fixed rate. Split mortgage situation.

    We dont see an issue with ability to pay back as the mortgage and the 40k loan is less than our current rent! Which has never been missed / late etc.


  • #4
    phormium
    Registered Users, Registered Users 2 Posts: 3,345 ✭✭✭phormium


    Too late now it appears but should have applied for it as part of the mortgage application.

    Any other type of loan is going to cost you more but probably no option at this stage, I'd probably wait until drawdown.


  • #5
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Borrow additional 40k for home improvements from the Credit Union and hold onto receipts. After 12 months apply for top up to your lender and get it included in your mortgage. You may need to pay for a valuation circa €150 however you will save on your interest rate.


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