Mortgage for uninhabitable house

I've done some searches and most of the threads are pretty old and, as we are all aware, the banks lending criteria are changing from month to month.

I believe some banks are still lending for self builds but I'm not sure what the story is for uninhabitable houses - needs electricity reconnected, bathroom, kitchen, windows replaced, new flooring, replastered, etc.

Assuming it's possible, I'd get a quote for a complete refurbishment from a relative, who is a contractor.

A similar house is on the market with a current offer of €170,000 and a 'back of the envelope calculation' puts the refurbishment costs at €70,000.

The house is on the market with an asking price of €90,000 and the cash available is €100,000. An offer of €80,000 should secure it giving a final cost of €150,000.

Therefore, the house would be bought with cash and €20,000 would be available towards a total refurbishment cost of €70,000 - requiring a mortgage of €50,000.

The question is, are banks entertaining lending in such circumstances? If so, I'll have the refurbishment cost properly estimated and take it from there. If not, it's back to the drawing board.

I'd put in a much lower offer (60/70k), spend 20k on the basics to make it habitable and then apply for a mortgage to make the improvements.

marathonic said:

Therefore, the house would be bought with cash and €20,000 would be available towards a total refurbishment cost of €70,000 - requiring a mortgage of €50,000.

Click to expand...

I don't think you'll have a problem, the way to approch it is that you've got 100K saved, you'll pay 20k Deposit, want a mortgage for 50K and you have 70K in cash for the refurbishment. The banks like it if you have the money for the refurbishment.

Be careful of the back of the envelope refurb costs. I'll take a bet that you'll spend more then 70K.

Even if the banks didn't want to work this way, getting the mortgage towards the purchase itself should be a much better option anyway as it eliminates the worry that the banks rules have changed when trying to drawdown the mortgage halfway through a refurbishment.

ronaldo said:

Even if the banks didn't want to work this way, getting the mortgage towards the purchase itself should be a much better option anyway as it eliminates the worry that the banks rules have changed when trying to drawdown the mortgage halfway through a refurbishment.

Click to expand...

+1. Don't buy with cash, expecting a mortgage later (however good it all looks)