Urgent question! If I buy a house as a cash buyer, can I apply for a mortgage to extend once I'm in?

[FourFlapjacksPlease]

Have seen a house that we are desperate to buy but will definitely have competition. We have nothing to sell and could buy it outright with no mortgage required. However, we would need to borrow 50 - 75k to add an extension. I think we'd have a better chance of getting it if we could proceed as cash buyers so I wondered if anyone knew of any reason we couldn't do this, and then apply for a mortgage to do the work once we were in? We wouldn't have a problem getting a mortgage based on income etc, just wondered if there was any reason lenders wouldn't be keen etc?
Any advice gratefully received!!

Yes. Mortgage just a loan secured on a house. You don't have to take it out at the point of purchase, you can take it out any time. You must explain what it is for though as lenders in general want to be told about any major changes to a property. You will also have to go through a valuation process again (even though you have just bought it).

That's fab, thanks so much. I didn't want to offer as a cash buyer and then mess the buyers about because a mortgage would be a problem. Right, off to ring the estate agent - how exciting!

Just a quick word of caution - you can buy whatever property you like as a cash buyer (uninhabitable etc) but you may then struggle to raise a mortgage against it as the mortgage companies will want it to have bathroom, kitchen, be of standard construction and in a good state of repair.

Thanks for that Amy. It's in good nick so shouldn't be a problem. It's just much too small as it is now so would need an extension for a new kitchen and another bedroom. I'm just really aware that mortgages are taking an age to go through at the moment so hoping that proceeding without will make us a much more attractive prospect to the vendor!

I'm presuming you don't need to borrow more than about 60% of CURRENT value to fund the extension in which case definitely do it the way you're proposing.

Standard construction? Survey?

One thing to beware of is many lenders won't allow you to secure a mortgage on a property paid for in cash until 6 months after the original purchase due to Money Laundering Regulations.

Yes it's a bog standard 1930's semi. Will get a survey done if our offer is accepted but it looks in good condition (roof/windows etc all good, no big cracks, signs of damp etc - just a lot of very unpleasant swirly carpet!) Waiting to hear whether we've got it - eek!

Bearbehind - I hadn't heard that before, thanks. Think I will call a mortgage broker tomorrow and see what they say.

or get a small mortgage now that you can then extend when you need ....

That's a fantastic idea ^

Just that if the OP got a 20% mortgage at purchase then the valuations and everything would be done, the rate would be rock bottom, MLR would be a doddle and adding to the amount at a later date will be just a few emailed forms.

TiP likes finding the easiest way to do things

Kinda negates the whole quick cash buyer scenario though.......
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20% mortgage should be quick to do

I agree with tip a small mortgage can be sorted much quicker than the searches and other palaver involved in house buying and it's a much safer option than trying to secure a mortgage on a cash buy straight after purchase.

It might not be entirely ethical but it's every man for himself in house buying but you could tell the vendors that you're a cash buyer then change to mortgaged before completion- as long as everything's approved it won't affect them anyway.