Buying off parents + renovation costs

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Funding renovation + valuation

Hi,

I'm looking to buy a property (prob. worth €350k) off my parents. The house is in need of complete renovation. I, as a single applicant can only get a mortgage for approx. 200k.
Can anyone tell me:
  1. If i buy the house from them at 200k, how do i go about funding the renovations ? which, i presume between plumbing, roof, rewiring, extension etc will cost around 100k. Do banks give an extra amount, which isn't calculated into the mortgage amt for renovation costs?
  2. Does anyone know of a way that i can get it valued in the state its in, but not buy it from them till its renovated (so i'm not paying mortgage during the rebuild?, and the value, from their tax point of view is less)
  3. Anyone know of the tax implications of this from their point of view, and mine? It's not their primary residence.
  4. Would the diffence ie the €150k that i can't give them, should they put a clause into their will to say to leave me 150k short, or would it be put into some other agreement? (just to keep other siblings quiet).
Thanks for any help!
Q
 
Can anyone shed some light on these questions for me, or tell me where i could find such information.

Thanks.
 
Hi Question,

Two quick questions for you...

  1. Are you looking to buy this house as a project (i.e. do it up and then sell it) or as a home for yourself?
  2. Are you PAYE or self-employed?
 
do a search for the thread "selling a house below market value" it will open your eyes to some of the pitfalls of buying your parents house below market value
 
LdFerguson


I'm looking to buy this house and do it up for myself. and i'm PAYE.

I'll have a look for that thread now.
Thanks
 
If you can only qualify for €200,000 (your quote), this means that lenders believe that you can afford to repay a loan of €200,000, on your present income. Yet you want to borrow €300,000.

Unless I'm missing something, this is the key issue and all the other aspects are irrelevant. Regardless of the value of the property, if you can't afford the repayments on a €300,000 loan, the whole project is unworkable.
 
Could i buy the house off them through the some sort of shared ownership scheme? ie they're on the deeds and i pay the mortgage?

A financial institution mentioned this to her, but i'm not sure - maybe they didn't realise that she owned the house already.

Does anyone have any ideas how i would go about buying the house? Surely someone out there has done something similar???!!

any suggestions would be very very grateful.
 
Could you buy off them for €100,000 and borrow another €100,000 for the renovations? That would leave you borrowing €200,000 which seems to be the size of loan you can afford based on your income.

You could then agree to re-mortgage the house in future years (assuming your income goes up and so does the property value) to borrow the additional €100,000.

Unless your parents are going to pay the mortgage with you, having their names on the deeds will not help you pay a bigger loan.
 
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