Hi BMG,
If a mortgage lender has approved your partner and his father for 250,000 then they have agreed in principle to lend them a total of 250,000, but subject to this not being anymore than 90% of the value of the property upon completion of the proposed works.
The property will have to be valued at 278,000 on completion of the work.
ie, 90% of 278,000 = 250,000
the normal procedure is that you pay down the 10% deposit to buy the property ,in this case 23,000, the mortgage lender funds the balance for the purchase i.e. 207,000
by agreeing to a 90% mortgage , you may not at any time have available to you any more than 90% of the property value, so you will have to fund the improvements yourself , on completion of the work a valuer will then confirm the property is valued at 278,000 following the work and you can then drawdown the balance of the funds ie. 20,000.