Found a house we like and have looked round it a couple of times. Needs a few things doing to it including a rewire.

If the house is worth £150k with good electrics and valued the same, and my offer of £145k is accepted, can i get the extra £5k on the mortgage to cover the cost of the rewire?

In other words, is it possible to get extra on your morgage to cover essential works eg new electrics?

*prices have just been given for example*

The value used by mortgage companies is the price that you are paying. Borrowing more than this will depend on your deposit and the loan to value ratio.

There are specialist mortgages for renovation, but for £5k that isn’t what you want (or will be offered).

Dave

By the sounds of it you want a 100% mortgage then?

If so I think you might have a problem getting a ‘normal’ mortgage at present as I think very few lenders have them available and if there are they will charge you a fortune.

If the house needs renovation, then you’re looking at a specialist mortgage so need a broker. Either way if the house will be worth £150k when the work is done and you want to borrow £150k then I think you’re out of luck.

You’ll need a deposit or the house to be worth a good bit more when the renovation work is completed.

I didn’t read the OP like that, I assumed he had a deposit, but needs to make sure that after the deal, he has some money to do repairs to wiring.

Here are some made up numbers:

Deposit – £50k
House Price – £145k
Wiring – £5k

You borrow £100k, add in £45k of your deposit and buy the house.
You now have £5k cash to do the wiring.
Loan to value is £100k:£145k = 69%

Any LTV under 70% will get you a reasonable interest rate, more than about 90% and you’ll struggle to get a mortgage.

Dave

House needs the following: –

Rewire, new boiler and bits of heating, 4 new windows and a door, new bathroom and a new kitchen. On top of that will be carpets, paint bla bla bla…

House is on at £150k in its current state but when done would be worth £180k (thats what others have gone for in the last couple of months) Have £20k deposit. Looking to offer a good chunk less than that. Just wondered if it was possible to borrow an extra £5k on the mortgage to get a couple of bits done.

short answer is no.

you say you have £20k deposit, so if you want to have £5k in cash afterwards to do renovations you effectively have only £15k deposit.

like I said before, there are specialist renovation mortgages, but generally these cost a lot (in terms of interest rate and arrangement) and (according to my mortgage advisor when I asked a couple of weeks back) are really only meant for houses which are not habitable at the point of sale.

Dave

Thanks for that Dave. Just thought i’d ask on here as most things get answered in the end.

Chris