Mortage For Greater than Purchase Price (To do House Up)

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pstj2000

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Hi,

We're looking to buy an older house in a more affluent area of cork City. We've found a relatively cheap house (250k) but it's in need of a lot of work (60 to 80k). to bring it up to modern standards. We have good savings and have previously been approved (expired) for amounts in excess 350k. Given the current banking climate would be there any chance of getting a mortgage for more than more than 230K (i.e. 250 x 92%) do as to bring the property into the 21st century.

Any guidance would be much appreciated.
 
This can be done, but only if the money you're spending on the house is going to be fully reflected in the value. In other words, if you spend €80,000 will the value then be €330,000 or more? This would need to be verified by the bank's valuer.

If so, the process would be that you'd get approval for the full amount needed. The mortgage would be drawn down in stages - say €230,000 to complete the purchase and the balance as the work is progressing.

Everything will need to be carefully documented. You'll need detailed written estimates of all the work that you propose doing. If any of the work is structural, you'll need a supervising architect or engineer to supervise the job.

Liam D. Ferguson
 
Hi Liam,

You seem to be v.knowledgeable on these issues, would you mind commenting in this scenario say 250K house value and 80K to do it up how much % will banks lend. I will say max. 92% of 250K and ?% of 80K.

Thanks
 
asharma said:
Hi Liam,

You seem to be v.knowledgeable on these issues, would you mind commenting in this scenario say 250K house value and 80K to do it up how much % will banks lend. I will say max. 92% of 250K and ?% of 80K.

Thanks
Click to expand...

90% of 250K and 90% of renovation costs provided that the value after renovation is at least 330K.
 
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