Paying for renovation - best way?

[fuckinglondonballs]

We're just thinking about this, not put an offer in anywhere. First time buyers.

What's the best way to finance renovation? Can you ever borrow more on a mortgage than the purchase price?

So say we borrowed £200k to buy the house, could we borrow another £10k to do the kitchen? Or can you only do that once you have enough equity? We'll only be putting down 5-10% deposit if and when we buy.

Or is a loan the best way? I know saving and having cash upfront is preferable really but just thinking of options...

Buying a wreck may be the only way we can buy.

You used to be able to do it, but I think that's one of the rules they've changed in recent years. It comes down to whether you can get the cost of the renovations out of your deposit and still have enough deposit to keep your loan-to-value ratio within tolerance. And keep in mind that that's not going to improve your options on the best mortgage deals!

I think you still can borrow, but it depends heavily on your 'affordability' rather than equity now. When you work out your monthly payment if you can leave a few hundred spare, you may be able to borrow again from the same vendor to renovate.

Doubt it to be honest. The way the market is going I would advise to buy somewhere that needs renovating but can still be lived in and then plough every spare penny you have into overpayments for 6-12 months and then borrow against the house after that time. The mortgage provider will want to see payment history before a remortgage and depending on the bank, that will be 6-12 months, by overpaying you will have more equity in addition to the increase which is likely to happen just by waiting. If you can, I would buy something now, prices are just going up.

Love to LadyKooKoo but sadly we don't have the tens of thousands needed yet.

We did our stuff six months ago, so not sure if recent rules changed things. We remortgaged after living in the house 3 years. The bank would only loan up to 85% LTV even though we could afford more and had been overpaying for years. The banks valuation may not be the same as what you think it's value is. And it relates to the house as is, not how it will be. We were able to make up the shortfall from a loan and an interest free credit card - but only do this if you really can afford it. One warning about buying a wreck is that the bank might put a retention on it ie give you less than you need until you get specific works done how you are meant to fund this work god only knows