# Can I get a mortgage for more than the selling price of the property?



## Audders (26 Jan 2009)

Hi,

Can anyone tell me how this works?  

House for sale at say 300k.  
Bank will offer us a mortgage up to 500k.  
We have the deposit and the stamp duty money but thats it.  House requires some renovation, so in an ideal world we could borrow 350k - 
300 to be used for the mortgage and 50 for modernisation.

Is it possible to have the bank lend 50k over the sale price of the house with the mortgage?

If it's not possible, could the seller say the sale price was 350 not 300, and then once mortgage monies received, give back the 50k?????  (I'm guessing this is a dodgey thing to do but I'm asking anyway, so apologies in advance.)

If none of the above work, then is it a case of applying for a  50k loan to run alongside the mortgage?

I know I souund stupid but have genuinely no idea and would appreciate any help.

Ta.


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## mf1 (26 Jan 2009)

A few years ago, a Bank might have lent you more money than a house was worth. Now they won't. They will only lend you a proportion of the actual market value or sale price - which ever is the lower. The bank want the security of (a) borrower   can repay (b) house is worth more than the mortgage and (c) borrower has life cover so if they die, the life cover will pay off the mortgage. 

Don't even think of going the dodgy route!

Perhaps you could get a personal loan for the money you need. Later, you could remortgage if the value of the house has significantly increased. ( Which is very unlikely in this climate)

However, even though you think you could get a mortgage of up to 500K, it is linked to teh value of the property. 

Perhaps you should be looking at properties that do not require any work? Problem solved.

mf


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## Vanilla (26 Jan 2009)

Or if you can satisfy the banks valuer that once the work is done the house will be worth more then they may lend you the extra.


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## Audders (26 Jan 2009)

Thanks for that.....

We have got approval for a mortgage up to 500k because we had been looking for properties over 400k.

However, a person we know wants to sell this property, and for a quick sale they will sell to us for less than the market value.  Yes, i know, in todays market what is that?!!!

Thats why I'm confidant we'll get the 300k mortgage approval......but we need an extra 50k for modernisation.  Can we take a case to the bank do you think to ask for more money based on the circumstances?

We own a house in the UK which is rented and has equity on it. 

We are just trying to fugure out how to get that 50k without having to take a personal loan, and felt there must be some way but we are missing it......

Thanks again.


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## Audders (26 Jan 2009)

OK, I have just seen your post Vanilla - how do we do this?


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## Bronte (26 Jan 2009)

You're making some errors, it's not the below market value that the seller will sell to you that matters (and beware of friends bearing gifts).  It's the bank's value that matters.  If you have a lot of equity on your UK property it may help in your getting more than the purchase price for the house.  Apart from the renovation monies you are in addition looking for a 100% mortgage.  I don't think they currently exist. And do you think in the current climate that's wise?


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## Mr DT (26 Jan 2009)

You say you have equity in a UK property, is this your opinion or an indepandant valuers opinion?

Also bear in mind if you live in the Eurozone and were to release equity in the UK and bring it to the Eurozone the exchange rate will of had a big impact. eg £50K was worth €75k it's now only €57k. Surely any irish bank would also take this in to account.

Given the current climate you seem to have a very risky plan. Why not save for another few years so you don't have to borrow the money in the first place?


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## Audders (26 Jan 2009)

Thank you for the advice so far.

Yes, we have equity in UK property, had several valuations recently, and we are sound on that one even taking the market drop and more into consideration.  Very small mortgage on a property bought many years ago.  Absolutely true about taking Sterling into Ireland at the moment - worth very little when exchanged, hence why we don't want to go that route at this moment.  Plus the house is meant to be a pension, but thats a whole other debate and we won't go there.

Of course, we could still purchase the property and live in it as it's absolutely habitable........just dated and in need of modernisation, and a few more rooms.....and surely better to be paying back 1100 per month on a mortgage than 1500 on rent???  Or is it?

By doing so, do you still think we are mad to consider buying right now, even for a 'bargain' property?  There is every indication that we could be left in our bargain property without the extension for a very long time!

I think I'm talking myself out!!

Really appreciate all the responses though.

Audders


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## Vanilla (26 Jan 2009)

Basically you tell the banks valuer what you intend to do. Then he will value the house as you intend to complete it. If he thinks the house completed will be worth, for example €400,000, then the bank will lend you 90% of 400,000. The initial amount to buy the house, then the rest might be in stages as your engineer will certify to the bank.


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## sexitoni (26 Jan 2009)

I'd love to know why you need to spend 1500 on rent in the current climate.

Anyhoo the biggest mortgage you get will be 92% of the purchase price. I think Vanilla is wrong and that they will not take future theoretical valuations into account because of work you may do or anything like that, certainly not these days, but I'm open to correction. 

Furthermore they won't give you more because you own the house in the UK. They may, however, take that house into account as collateral on your new mortgage.

If you're not going to wait and save up then you're only real option is either another personal loan here or remortgage the house in the UK. If you remortgage the house in the UK the sterling will be worth less but then again the repayments are theoretically cheaper too.


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