ebs mortgage question - extra monies

hi, we have been approved a mortgage for a house with getting additional money to do renovations and an extension. what we wanted to know is.

if you are getting work done this way can you pay as you go. as in get the plasterer in, done and then paid ?
then the kitchen company, in, done and paid ?

or do you have to wait, and get the contractors to wait also, until the all the work has been done and then paid?

also, how is it paid ? directly to the contractors or the solicitor to the contractors ? the reason i ask is we have one or two people who would be able to do the works but would probably look for cash job ?

thanks

You should really ask the EBS if you are going to be able to draw down the money in full once you've signed for the loan. I believe you can do this. Then it's all up to you who you employ and what you pay them and how you want to pay them.

It is the norm for most of these tradespeople to prefer cash, however, you've no proof you paid them if something goes wrong with their workmanship. Therefore you would not want to pay them until you are sure you are completely satisfied with their work. You can't go back to the EBS and say the moneys gone, the works not done, can I borrow some more. And unfortunately, the worst ones to deal with are family as most people can attest. At least if its a stranger and you're getting no satisfaction you can eventually get mad with them

The money for the purchase of the house will be paid to your solicitor. The additional monies for the renovations may be paid to your solicitor or paid to you - check with EBS.

EBS may also facilitate a "stage payment" drawdown of the additional monies, whereby instead of getting all the money up-front, you can get it in stages, as the work progresses. The advantage is that you're not paying interest to EBS for money that you don't need yet.

Don't pay cash - apart from the lack of redress detailed in the above post, it encourages tax evasion.

it will depend on the scale of the works to be carried out, the loan to value of the property on drawdown, and whether the Lender has made a retention on part of the mortgage (based on a recommendation by the valuer) - pending the completion of some or all of the renovation or refurbishment.

What is the purchase price of the property and the estimated cost of the extention?

What size mortgage have you been approved for?

What will the estimated value of the property be on completion?

What is the purchase price of the property and the estimated cost of the extention?

purchase is 156000 and 30k to do renovations, but we have spoken to the valuer and he agrees that if we were to put an extension onto the property it would raise the vale up to 260,000

What size mortgage have you been approved for?

200,000

What will the estimated value of the property be on completion?

240,000-260,000

its highly unlikely that the EBS will give you in excess of 100% finance up front, what they will do is apply a retention of the 30k or want it drawn down in stages.

Reasons being that if they gave the 30k to you up front and for whatever reason - the money was spent and the work not carried out - then you could owe more to the bank than the property is worth.

You'll have to commence the work, and when it is complete, then the bank will instruct a valuer, or a supervising builder/architect to perform a new valuation - and once the new valuation hits the pre-agreed level - then they will release the funds