Is is easy to get a mortage to cover work not yet done on a house when you buy the house, or do you need to use a bridging loan ? Obviously the mortage people would have to be convinced that your plans will raise the value of the house sufficiently. Simon.
Think it might depend on what percentage of the house's valuation the mortgage is for. But I can't see them lending more than they could get back if things go pear shaped.
Depends a bit on the lender. Also, of course, on how much you are borrowing relative to the present value of the house. Having some essential work done may be a condition of the mortgage and they may only release the money in stages with proof of the work having been done
They told me three years ago now that to borrow more money to renovate the house I had to renovate it first to raise it's "value".... :-) Doh!
Mark S.
I mean in a situation such as: house value 110,000 mortage value 130,000 spend on renovations 25,000 new house value: 150,000 i.e. the mortgage is worth more than the house at some stage. Simon.
Two chances really. Slim and none!
Peter Crosland
I think you'd have to remortgage your equity in the property rather than get a bridging loan, and you'd probably want to make sure that your insurance covered you for damage that might be caused by the proposed work going badly wrong.
No chance, I would say. If it were
House value 130,000 Mortgage 110,000 You might get 20k to spend
If the current equity is bigger than your debt and you can afford the payments (according to their criteria) they'll 'ave yer arm orf.
Not a chance I'd say. A mortgage is cheaper han a personal loan becuase the lender has the security of a first charge on the property. They will only lend as much as they are confident of recovering in the case of a forced sale.
Given *this* information, I agree!
Well maybe. I enquired of as BS in March if they would lend around 20% of my property's value, (moving the mortgage from another lender, with bit extra borrowed for improvements). Its taken the until last week to send out their offer document. I've now finished most of the work and by the time I have the tuits to do the rest I will also have the cash. *ankers!
They will only normally lend a percentage of the value of the house, where the percentage is 100% or less.
Some lenders will lend 110%, but at a price, as you can get 0% credit cards of 20K+ for 9+ months, these are much cheeper.
When the owkr is done, if you can convinve the morguage people the value of the property has gone up, you can transfer the loan from the credit card, (who will suddenly want 25%) to the morguage. However its not always eacy to convince them the value has gone up.
Rick
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