Financing incomplete house
Discussion
House as I understand it is a repo. It was complete at one stage, but has since had appliances, bathrooms, etc gutted.
Wiring is still there, as is plumbing and drainage (they were even kind enough to leave a shower base). Just need boilers/radiators, bathroom and kitchen to make it "habitable".
Can anyone recommend any specialist brokers or providers for this kind of thing? I've been informed the usual high Street banks will run a mile?
Wiring is still there, as is plumbing and drainage (they were even kind enough to leave a shower base). Just need boilers/radiators, bathroom and kitchen to make it "habitable".
Can anyone recommend any specialist brokers or providers for this kind of thing? I've been informed the usual high Street banks will run a mile?
Mainstream lenders won't consider it as the property needs to be habitable at the point of survey.
You will need specialist Development Finance. In most cases, you will need to put down 25% of the purchase price. You can then usually borrow 75% of the refurb cost which is usually released in stages and in arrears so you have to fund the refurb stages yourself and then get 75% of the cost back at each stage.
You will need specialist Development Finance. In most cases, you will need to put down 25% of the purchase price. You can then usually borrow 75% of the refurb cost which is usually released in stages and in arrears so you have to fund the refurb stages yourself and then get 75% of the cost back at each stage.
Art0ir said:
OK so for simplicity's sake, if the purchase price was 100k, I would need 25k as a deposit. With 40k of work needing done, I would receive 30k after this is completed? I understand the logic behind it, but it certainly complicates things.
Yes.Although you wouldn't need all of the £40k at the outset, just enough to complete the first stage, as you'd get 75% of it back on completion of that stage allowing you to move on to the next stage etc.
It's not a simple process and you do need liquid funds to make it viable.
An alternative approach is to consider short term funding, on the assumption that you know quite accurately what the value will be at completion and/or rental yield will be.
The development mortgage will cost you a bit to set up and will not be at a very low rate. Once it is habitable you could remortgage to a conventional rate (more fees).
If you are planning on getting a team in to blitz it I would guess that you need a month by which time you could get a High Street remortgage application in with the aim of completing after another 4-6 weeks.
That way you are looking at 2 months' bridging (call it 3 for contingency) at 1% a month plus fees, this might be cheaper, you just need to do the maths. And you need to be 100% certain of being able to remortgage because you don't want
The self-build or development mortgage will be cheaper if you are planning to DIY over a longer period, but they are a faff requiring revaluations at each stage for example.
The development mortgage will cost you a bit to set up and will not be at a very low rate. Once it is habitable you could remortgage to a conventional rate (more fees).
If you are planning on getting a team in to blitz it I would guess that you need a month by which time you could get a High Street remortgage application in with the aim of completing after another 4-6 weeks.
That way you are looking at 2 months' bridging (call it 3 for contingency) at 1% a month plus fees, this might be cheaper, you just need to do the maths. And you need to be 100% certain of being able to remortgage because you don't want
The self-build or development mortgage will be cheaper if you are planning to DIY over a longer period, but they are a faff requiring revaluations at each stage for example.
Ask an expert but a standard Howdens kitchen and similar bathroom is a couple of days each to fit plus decoration, tiling can take time. If the pipes are all there then replacing re-fitting rads and a boiler isn't much more than a couple of days either. Of course if the underfloor doesn't work...
Are you 100% sure the prop is a repo held by an asset management company being sold via an high street EA`s?
If it isn`t you may be able to negotiate to put down 10% depo exchange contracts then complete works before completion of sale. You could try this scenario with the asset company to see if they will agree to it, but it`d depend on what interest there has been with viewers, as they normally prefer a quick completion. Worth a shot they`ll either say yes or no.
If it isn`t you may be able to negotiate to put down 10% depo exchange contracts then complete works before completion of sale. You could try this scenario with the asset company to see if they will agree to it, but it`d depend on what interest there has been with viewers, as they normally prefer a quick completion. Worth a shot they`ll either say yes or no.
pacoryan said:
Ask an expert but a standard Howdens kitchen and similar bathroom is a couple of days each to fit plus decoration, tiling can take time. If the pipes are all there then replacing re-fitting rads and a boiler isn't much more than a couple of days either. Of course if the underfloor doesn't work...
A friend of mine did this a few years ago. Bought some second hand base units with sink and we fitted them in a day, which was enough to get a mortgage. He lived with it for 6 months until he had saved enough to get the kitchen done properly.Gassing Station | Finance | Top of Page | What's New | My Stuff