Can you borrow extra for renovations?

[Teaandtoast1]

Hello, as the title states. Can you borrow money to do renovations? Seen a house for 225k bit it needs say 20k of work, can we borrow more than the house is worth on a mortgage? I always thought you couldn't but now I'm not sure?

Thank you folks.

No you can't these days. I saw your other thread and I think what the other poster was suggesting is that if you have a 20% deposit for instance (43k) why don't you instead take out a mortgage for a 10% deposit and use the balance of your savings for the renovations.

If you don't have enough of an existing deposit to do that or that wouldn't make financial sense. Given that your total borrowings are less than your max, you would probably qualify for a personal loan to do the renovations.

Tesco have personal loans for up to 15k for an interest rate of 4.5% that can be repaid over 10 years. If the monthly payments won't stretch you, that is one way you could finance most of the work you need done.

However, unless you are up north, an extension (including new kitchen) can cost a lot more than that (I think that's what you are planning right?)

I had a feeling that was the case thanks. Yes we are up north in manchester. I may speak to the mortgage advisor then and see what options we have. I'll have a think about a loan too. I've never had a loan so don't know much about it, I suppose it's just like part of your mortgage though isn't it, you just pay 2 things off.

The house is on at 225k, I'm guessing 20k would do the extension and renovations we need.

We have 40k deposit. I'll ask the mortgage advisor what the monthly repayments will look like if we put 20k deposit down then.

Thanks for your help.

There are specialist mortgage companies/brokers that can help with this kind of arrangement. Try googling Buildstore, I know they do mortgages for renovations and self builds where they release the money upfront for each 'stage' of the build. If its a big enough extension/renovation job they may well be able to help you as well.

Bear in mind that if it's a major renovation you may not be able to get a residential mortgage anyway. Does it have kitchen, bathroom and reasonably ok roof?

Hi, it's the Kitchen that needs extending, it's a teeny tiny 2.6x2.0 meter kitchen thats been an old ladies so it's falling apart.

The bathroom is old too bit it's liveable, could probably do that for say 3k. The rest of he house is fine, just dated, just needs the woodchip removing and 30 years of gloss paint stripping.

It's just got so much potential and is in a great school area too.

Thanks for the advice,.

Buildstore's interest rates are very high. You are almost certainingly going to be better of either putting down a 10% deposit on the house or taking out a personal loan.

Even though the interest rate on the personal loan may be higher than the 10% mortgage rate, its important to do the math both ways looking at how much INTEREST you are paying in both options.

20k seems like it would only get you a small extension so it might be worth speaking to your future neighbours who have done similar to make sure your budget will get you what you are hoping to acheive.

Thanks, lots to look into, I'm going to be busy.

The house could easily fit a huge extension but in reality I think we should just do a little side kitchen on for now. Next door has a side and back one, looks amazing! Bit would of cost a lot. That will defiantly have to be a future plan.

Ooooo so much to think about, and there's no saying we will even get it! Houses near us are going over asking price at the moment!

Our kitchen's 1.8x3m, and it's all we need it to be. I love it. If you can't afford the extension straight away, you can definitely get a workable (if not luxurious) kitchen into that space.

Really? I've been trying to see how we could, I'll try and attach a pic, the estate agents have made it look bigger than it is with a good angle though. I've been trying to see how you'd get everything in bit thought it's a bit small?

As previous posters have advised, you wouldn't be able to borrow more.

Most lenders have now restricted their lending to 90% of the value of the house which would mean you would need to have a deposit of at least £22.5k.

Bear in mind though if the house is not in great condition it could possibly be valued lower than the advertised price and the bank will use the lower amount to determine how much they are willing to lend.

That's true. They did that when I recently sold my dad's house, they down valued it.

It's a minefield isn't it! We could stretch to 22.5k deposit and still have enough to do it then maybe.

We're not willing to go over asking price though. We'd have to walk away I think.

The other option is try the small kitchen idea and just wait a few years to extend maybe.

Sorry if I go on, but I'm a bit evangelical about tiny kitchens! Sure, we can all work out the downsides, but there are upsides too: everything in reach; you're forced to have a place for everything; takes me less than 2 minutes to empty the dishwasher and put it all away; and when you fit it out you can get the best tiles, and the best worktops, because you need so little of it all.

Some things you might want to think about...

• kitchen that shape begs for an L-shaped format. If you really need extra cupboard and worktop space, you could consider a row of wall-units-as-base-units on the other long wall.
• is the kitchen adjacent to the under stairs space? Can you knock through to the under stairs cupboard and slot a tall fridge-freezer in there to clear space in the kitchen itself?
• is the washing machine in the kitchen? Could it go in the bathroom? Or under the stairs?
• if doors open into the kitchen, reverse them to open outwards. Liberates you to maximise use of floor space.
• how's your ceiling height? Add an extra row of wall units above the normal-height ones... we were able to fit in a row of 30cm-high "bridging units", which we use for infrequently-used stuff (baking kit, pasta machine etc)
• have a sideboard or dresser in living room or dining room, or the hall if there's room, to store things like salad bowls, picnic gear, pudding basins and other infrequently used stuff.
• got a shed or garage? Put a chest freezer out there, and you can manage with an under-counter fridge in the kitchen.
• microwave lives on a shelf.
• if you can wangle it, include a slim dishwasher. Keeps worktop clutter to a minimum.

Sandthorn my kitchen is same dimensions as yours but also tricky because of door placements and where gas/plumbing/boiler currently are. Are you evangelical enough about small kitchens to help me think about mine?!?

Your not going on atall, I'm really keen to hear ideas and I appreciate your input, I've just been looking up 'tiny kitchens' on Pinterest.

Ok, let's have a think.

• so you think leave one wall with no units and go for the L shape? So the wall that's sort of empty at the moment?

• the understairs space is good and is in the kitchen, I was thinking maybe fridgefreezer or use it as a pantry maybe. The old lady used it as a pantry.

• god I forgot about a washer! I wonder where the lady put hers? No room in bathroom, it would have to go I'm kitchen really.

• kitchen door opens out so that's good.

• height is a good idea, so get cupboards right upto the ceiling.

• true about the dresser, i do this now (I'm a shabby chic up cycle fan)

• does have an old shed but I suppose a new one wouldn't be too expensive. Not keen on going outside for stuff I must admit, although it would stop me eating ice cream :-)

• microwave on shelf, yes, Defo good idea.

• dishwasher, that's the husbands job ha.

I've seen these ideas (pics attached hopefully) if they will work in 5.2 squared meter kitchen.

Little kitchens can be great. Even though we extended ours into a kitchen family room, we kept the kitchen component relatively small. Huge kitchens are a waste of space and are a lot less efficient.

Good luck! These are great ideas

Those pictures are gorgeous, and that's exactly the kind of thing you should aspire to. Here's a nice article for a bit more reassurance that small need not be a hindrance:

www.theguardian.com/lifeandstyle/2011/oct/19/cooking-small-kitchen-advantages-change

Quod, I have to admit that we shunted our boiler to the bathroom, which is a bit of a pain up there, but not to the same degree. We've got an annoying array of windows and doors in the kitchen, though... A door on each of two walls, and a window on the other. We raised the windowsill a few inches to fit the sink underneath. My dad shifted a doorway two foot along the wall so he could get a sensible run of worktop on each side of it. You really have to look at the problem from every angle.

That's a good article there. Thanks.

Well I booked a second viewing, sorted it all out with mortgage advisor .......... Then the estate agent rang back to say they had accepted the first offer and all viewings were cancelled :-(

Well at least I know now not to be afraid or a small kitchen!

Back to the drawing board!