how do you go about getting a mortgage to buy a house that needs money for renovations straight away? In our case, we are struggling to find a "done" house in our area (south east) at our price range (at or around stamp duty threshold). We are currently renting. We have about 100K for a deposit and can get a mortgage of around 400K on our salaries. But there are no 500K houses around. So we are looking at probate sale etc places that need a lot of work - complete gutting and one or 2 storey extension. These come in at around 375K and would need 70/80K spent I guess. So in theory it works.
However, our mortgage advisor says that it will be difficult to get a mortgage for a house like this as we will have to hold back 80K of our 100K deposit for the works so won't have enough money at 20K odd left for a minimum deposit for a mortgage - even though we would be borrowing less?
How does it work? Is there a better way to achieve a family house that is valued at or around 500K. Don't care about resale, just a place to live.