Renovation Mortgages
Buying a Doer Upper? Get the Mortgage Right First
Planning to buy a house and do it up? The way you fund the work matters. Get it wrong and you could be stuck with a lower valuation, a retention or a lender who will not lend at all. Here is how to plan it properly.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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The Big Mistake
Lenders Lend on the House as It Is Now
Your mortgage is based on the current value, not what it will be worth after the work. Plan the funding before you offer.
- ✓Valuation: lenders value the property in its current state
- ✓Retentions: if urgent repairs are needed, some of the loan may be held back
- ✓Habitability: a home with no kitchen or bathroom may not be mortgageable
- ✓Later borrowing: you may be able to borrow more once the work adds value
How We Help
How to Plan a Renovation Purchase
Five steps to avoid nasty surprises.
Read the Home Report
Category 3 repairs and the valuation tell you a lot about what lenders will think.
Price the Work
Get rough quotes before you offer so you know what you really need.
Pick the Funding Route
Savings, a further advance later, a remortgage or a specialist lender.
Choose the Right Lender
Some lenders are better with older or tired homes. We know which.
Do It in Order
Make the house safe and liveable first, then improve.
Ways to Fund the Work
Your Options
There is usually more than one route.
Further Advance
Borrow more from your lender once you own the home, subject to affordability.
Talk It Through →Specialist Lenders
For homes that are not mortgageable as they are, short term finance may be needed.
Book a Chat →Common Questions
Renovation Mortgage Questions, Answered
The things buyers ask us most.
Can I get a mortgage on a house that needs work?
Often, yes, as long as it is habitable and the lender is happy with the valuation. Bigger projects may need a specialist lender.
Can I add renovation costs to my mortgage?
Not usually at purchase. You may be able to borrow more later through a further advance or remortgage.
What is a mortgage retention?
Where the lender holds back part of the loan until certain repairs are done.
What makes a house unmortgageable?
No working kitchen or bathroom, serious structural problems or some types of construction.
Should I tell my lender I am renovating?
Yes. Large works can affect the property, so it is best to be upfront. We will help you.
When can I remortgage after renovating?
It depends on the lender. Some will look at the new value soon after the work is done, others want you to wait.
Related guides
- Home Report explained
- Remortgaging for home improvements
- How much to offer on a house in Scotland
- Buying a house in Scotland step by step
- All mortgage questions answered
Written by Tony Flynn, mortgage broker at Tony Flynn Mortgages, helping homebuyers across Lanarkshire and Scotland. This page is general information, not personal advice. Speak to Tony about your own circumstances.
Get in Touch
Thinking About a Doer Upper?
Fill in the form and we will be in touch within one working day. Tell us about the house and your plans and we will tell you the best way to fund it.