…Say you're looking at buying a house that's on the market at £190K, the house has been valued at that level, and you've agreed to pay a deposit of 15% at that level.

Could you then negotiate a better price from the vendor using the extra money from the mortgage to redecorate/improve the house? Could this be done or is ALL money paid via the banks to the vendor etc?

I have no idea with this, but the inflated market is taking ALL my money for the deposite leaving nothing to redecorate.

Aww drat…Mods, could you move this to "chat" please?

You could just ask the bank/mortgage co for more money on top of what you need for the house purchase. They certainly used to do this before everything went a bit pear shaped.

Yeah – it never used to bother them what the money was for as long as they had enough capital in the house

Looking at those sorts of figures would make me puke with worry – I'm glad my house buying days are behind me, good luck

The deposit isn't paid to the seller as a deposit, thats just a requirement by banks for some surety – otherwise you don't stand to loose anything if the house is repossesed, as it would be like renting a property. That's the reason the more deposit you put down the better the rate of interest you can get.

So no, you can't barter down after a deposit, although you can try prior to exchanging contracts if there are faults/issues, etc

Hi.
The answer is yes if you do it as a retainer through your solicitor. Agree an amount to carry out the required remedial work with the vender to bring it up to scratch, then your Solicitor keeps the money until the work is being done or completed. Then the Solicitor hands over the money normally on completion of the agreed work.

Or much easier is to agree a schedule of work to be done with the vender and agree that the work will be done before completion. You exchange contracts to buy, so that the vender is sure that you will buy the property, but only complete on the property after the work has been done to your requirements.

Please understand that this is only my interpretation of your situation and con not be taken as advising you!!!!

Hope it goes well for you
Richard

What he means is can he get a lower price and get the balance of the mortgage money paid to him instead of the vendor?
No, unless you agree this with the mortgage company – it would be fraudulent. Your solicitor acts for both you and the bank, they give the money to the solicitor on trust to pay the vendor – specifically not to give to you.

However, if you can reduce the price and will use the money to renovate there is no reason the bank wouldnt give you the balance if they already agreed to lend that amount against the property.

What he means is can he get a lower price and get the balance of the mortgage money paid to him instead of the vendor?

Yup, that's what I'm after.

It's a period cumbrian terraced house and I want to triple glaze the front windows with a specific type of sash and to restore some features, improve the kitchen and outhouses (for the bikes) ETC.

All of this will add value, especially the windows as it's on a road.

As said above I am certain you cannot take the difference.

But I am sure there are some options with some lenders to include purchase price plus improvements into the mortgage.

Alternatively get a bank loan to make the improvements.

Talk to your solicitor about this. It's quite common for a lower purchase price to be agreed after the lender's initial valuation. As already mentioned, your solicitor is acting for the lender as well as you and is obliged to inform that lender of any changes to the purchase price prior to the completion date. The lender will then issue you with an amended mortgage offer showing the new lower purchase price. Whether or not the lender reduces the original mortgage amount depends on what their minimum deposit is. If it's 15% then they will reduce the mortgage figure.

So, if you agree a reduction of say £10,000 in the purchase price, your deposit will reduce from £28,500 to £27,000 leaving you with £1,500 to spend on a new bike, err home improvements.

I would need to have details of the specific mortgage deal you are going for and how much of a reduction in the purchase price you are considering to fully answer your question.

Alternatively get a bank loan to make the improvements.

This is the answer.

Why?

You negotiated 10k off the asking price and used this to do the house up. You'd be paying off that 10k for a very long time and the interest would be alot more than if you simply took out a shorter-term (say 5yrs) home improvement loan.

Think of it this way:

10k from 'within' the mortgage- you'd be paying that back over the term of the mortgage.

10k home loan – shorter repayment period therefore less interest.

Plus as noted above- I think its shaky ground anyway if you angled for say essentially a 100% mortgage behind your lenders back?

All of this will add value, especially the windows as it's on a road.

Bear in mind that even in the crazy market of 2007, almost all renovation / home improvement work had negative overall returns, e.g. you spend £20,000 on a house, it typically ups the price by about £10,000. We bought a house someone had just decorated, re-roofed, replaced windows (wooden special listed building windows) and spent in total at least £25,000 on (we have receipts for most of the work), and it went for probably about 5k more than it would have otherwise, and 5k less than she'd paid for it 2 years earlier (it was 10k less than the other similar, slightly smaller one over the road, but we bought slightly into the drop in prices). So it might well be that the bank are less willing to lend against improvements, particularly for someone who has a very small deposit.

but the inflated market is taking ALL my money for the deposite leaving nothing to redecorate.

If you think the market is inflated, surely having as big as possible a deposit, then saving up to do the redecoration is more sensible than getting into a situation where you risk negative equity? Particularly at a time when interest rates can only go up (although who knows when).

Joe

but the inflated market is taking ALL my money for the deposite leaving nothing to redecorate.

Take some comfort from many of the programmes on TV. Many live onsite in caravans for months. Many live in one part (one room).

All you need to do is spend 2 weeks in there- redecorate/clean etc. Get the house upto a reasonable 'student' digs but clean level then over the months do specific parts up slowly?

It'd take time but at least you wont be overstretching yourself.

Im buying a house at the moment where the owner sadly died and spent sometime in there. I'm going to hire a large transit – note different to a skip and cheaper. Then I'll make a few runs to the council tip. Then once all clear of carpets/fitted wardrobes I'll start the renovations proper in the evenings.

Hora – check on that one – some tip nazis might think you are a tradesman and stop allowing you onsite unless you pay (especially at weekends). And don't some tips now have 'twice a day' rule too? Madness I know.

You can obtain a letter from the local council detailing its your house and you are throwing away stuff before you move in.

We did this when I helped my BROTHER IN LAW create a sodding drive. The lazy tart pretended he was busy trying to hack through a thin-bush whilst me and his sister humped loads of crap into a Transit!

Aha – good information to have there – I shall remember that one.

Brother's in law ehh – ufck 'em all I say.

Yes. No way I'd pay for a skip etc.

Transit on a day-to-day basis. Second tip- you can hire pristine/fancy Transits but I prefer to hire manky/old and worn looking ones (Salford Hire locally are good) – so they you dont have to worry about scratching them at all.

OP- just roller EVERYTHING white – ceiling, walls. etc. Then as you go along strip the skirting boards, take off the doors etc.

This way your leaving in a 'clean' house and its bearable short-medium term.

Great to move into a pristine house but imagine you need money for emergencies later on but already committed most of your wage just to pay for your fancy house from day one?

Better to rebuild your savings asap AND do up as you go along. Less stressful for you I reckon.

i was in a similar situation, my house was bought with a 10% deposit 3 years ago, value agreed with the surveyor, then due to the amount of work he picked out I blagged an extra 6k off. Net effect to me up front? £600. super.

I did the 'live in it whilst doing it up' thing, after 6 weeks intensive work (ripping out asbesdos). Worked fine, but was slow. plus side is the costs are spread out – so £3000 for a kitchen was spread over 6 months of actually doing it, which meant it was easy to stomach. I also got a 12 month 0% interest credit card to bung lots on, timed to 'expire' just as my bonus came through (within 3 days iirc)

whilst me and his sister humped loads…in… a Transit!

that'll teach him

I know. Seemed to be a very tough-bush from memory..

value agreed with the surveyor, then due to the amount of work he picked out I blagged an extra 6k off

I'm gambling on this side. I don't think there is anything else 'major' that needs attention hence the very basic survey.

Just discussed a similar question with my solicitor recently (and I did not bother reading all the replies above); the bank – of course – only gives you a certain percentage of the value of the house, say in your case 85%. If you then re-negotiate with the seller a reduced price that is not more than 5% lower than the originally agreed price, the solicitor does not need to pass this price onto the bank, hence you can use the money you saved on your deposit towards the renovation, but you will get a different mortgage if you get more then 5% off. Sven

Just discussed a similar question with my solicitor recently (and I did not bother reading all the replies above); the bank – of course – only gives you a certain percentage of the value of the house, say in your case 85%. If you then re-negotiate with the seller a reduced price that is not more than 5% lower than the originally agreed price, the solicitor does not need to pass this price onto the bank, hence you can use the money you saved on your deposit towards the renovation, but you will get a different mortgage if you get more then 5% off. Sven

might be the case in your specific instance, in mine it wasn't – it's certainly not a hard-and-fast rule

by the way – the other tip that I found out by experience – mortgage deals run from date the mortgage was agreed, NOT the date you actually exchange on – i lost 6 months at 0.27% interest because of that 🙁

richyf – Member
Hi.
The answer is yes if you do it as a retainer through your solicitor. Agree an amount to carry out the required remedial work with the vender to bring it up to scratch, then your Solicitor keeps the money until the work is being done or completed. Then the Solicitor hands over the money normally on completion of the agreed work.

ah, a quistclose.