Is there such a thing as a renovation mortgage...?

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Is there such a thing as a renovation mortgage...? That is, lending in stages, assuming we've got some equity, but that would allow us to do up a place?

There's a great property with great potential and I think it will go to a builder/developer with cash in their pocket.

We have enough equity to just meet the guide price (and maybe a touch over, although no idea if 'informal tender' is likely to go lower or higher) but no more than that to further renovate.

I'm assuming that we'd need to demonstrate some conditions could be met to anyone who is likely to lend on it? Or is this just a no go and I should give up dreaming of buying a money pit we have no money for?!

So you have cash equivalent to the guide price at an auction but you’d need more money for the work required?

If the property is habitable, you could buy it with a mortgage and leaving a pot of money for the work.

Alternatively, you could look into bridging loans and other investor type products.

When you say you have enough equity to meet the guide price - do you mean you have enough to buy without a mortgage?
If you can buy without a mortgage but need to renovate, I'd buy with a mortgage (probably borrowing more than you think you'd need on, say, a one or two year fix - you can repay any excess at the end of the fix) and use part of your funds to pay for the renovations.

If you need a mortgage, can you hold back some equity for the work and put down a smaller deposit? You'll have a higher LTV and probably higher interest rate, but will have the funds (we put down £10k less deposit as we needed to replace the roof).
If it's livable / livable after some essentials, you could fix for a year or two and then borrow extra after that period (based on what you've paid off / potential salary increase)?
I don't think you can borrow more than the property value but a broker might know of something. 100% mortgages were massively scaled back after the 2008 banking crisis, but I think you can possibly get one if you have a guarantor (leaving your equity to fund the works)...

Can you get a mortgage for more than what the house is worth?

In Scotland, you can only get a mortgage based on the home report value so you can't just borrow more than what you need unfortunately. Not sure of the rules elsewhere.

Can't you just get a mortgage for, e.g, 20% of the value of the property and use the equivalent amount of your own capital to do it up? That would be the simplest way. But a good broker can help you find the best solution. Ours is excellent and has got us mortgages against the odds several times. PM me if you want his details.

If you can buy for cash at auction, you can then apply for a mortgage afterwards(usually capped at 50% of value if not fully habitable). I have heard of stage payment mortgages on grand designs, but would be from a specialist broker.

off set mortgages are good for renovations.

Ooh thanks all. Went a bit quiet because we were out and about looking at houses!

Yes, the current doer upper we're looking at is at a guide price of almost exactly the same as the equity we'll release once ours is sold. Sale will shortly be underway moving to contract stage but even so I don't think we'll get the cash ready for this particular one in time.

Yeah we could definitely hold back some of the cash for works and mortgage the rest and the work. I'm not too sure what counts as habitable but it does have water, electrics, toilets, drainage. Looks like (from photos, not got into it yet) lots of damp in walls though. So I wouldn't live in it but I guess in principle it could be habitable?

Did a bit more research and have found a specialist broker who does think we could get a mortgage for purchase and work, based on our equity and salary. So just need the perfect plot/derelict place now!

DH less keen than me though. He'd prefer a new build for stupid money; I'd prefer to invest in somewhere we could make perfect! Our sale is proceeding anyway but no rush to buy as we'll rent for a while to see what happens later, ya know, with Brexit, general elections and all, and indeed to live on while we find the right house/plot But any advice from seasoned doer uppers welcome.