Small house - Extension and Mortgage

SomeDay

Registered User
Messages
20

Hi

My Girlfriend is think of buying a small cottage in Louth and then spending 70K on an extension. 170k for the cottage and 240K in total.

She is a first time buyer, can she get a mortgage for the 240K ??

Thanks
SD
 
Thanks ClubMan she is fine there.

I am just wondering is it possible ? Will lenders give you one loan for house and extension at the start ?
 
Lenders will limit the loan to 92% of the property purchase price or 100% in the case of 100% mortgages.
 
So Clubman are you saying that you can't get a mortgage to include additonal work to a property ?

I thought you would be able to if other people can get a mortgage for a self build or a stage payment new build house.

Or would it be that you would buy the house and then re-apply for a top up to cover the additonal cost of the work? - would this be risky if the bank turned you down for the top up after giving you the mortgage for the initial purchase?
 
Unless the lender will structure the loan for the purchase and renovation of a property as a self build mortgage (in which case detailed plans and stage payments would be involved) then the 92% or 100% limits will apply as far as I know. Perhaps somebody in the business (e.g. Sarah W is always on the ball with queries like this) can comment.
 
"....in which case detailed plans and stage payments would be involved"

I wonder would this cause a delay in agreeing the initial purchase if you had to get detailed quotes from builders before looking for mortgage approval - there would be a chance that someone else could buy the house before you had the approval.

BTW I ask all this out of academic interest only; I have always wanted to buy a house and do it up - someday if I have the money hopefully!!
 
In this scenario the purchaser would indeed need to have plans (and planning permission if required) and estimates for the intended works. The valuer would then value the property on a "now" and "when improved/renovated". The lender would offer the maximum available/required on the purchase price and the balance to be released once the works have been carried out and a further inspection done by the valuer. If the works are extensive a series of stage payments may be preferable. The bottom line is you can only borrow money after the work has been completed and then only if the maximum percentage advance is not exceeded.

Sarah

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