Renovation Mortgage Deposit

[delta9]

Hi there,

Can anyone answer this query for me please:

 

From the Ecology website:

Quote

What deposit do I need for my renovation?

You need a 10% minimum deposit to purchase the property and a further 15% – 20% of total build costs to start your renovation.

 

Are these deposits treated as separate transactions ?

 

For example

£100,000 for Property = £10,000 Deposit (10%)

£40,000 for Renovation = £6,000 - £8,000 Deposit (15% - 20%).

 

Do I need just £10,000 to purchase the property? And worry about the Renovation deposit at a later date i.e. 6 months after purchasing.

 

Or would I need to put both deposits upfront from the word go i.e. £16,000 - £18,000.

 

Would make sense to just put down 10,000 first as I expect in the first few months of renovating you would just ripping out stuff and hacking off walls etc prepping it which doesn't cost a fortune just manual labour etc which I would be doing at my own expense... But maybe the lender would need the full whack of deposits for their security... Not too sure how this works!

 

Cheers for any advice, it would be much appreciated to hear from someone who has been down this route before!

 

 

 

Edited November 17, 2021 by delta9

[Roundtuit]

Not specific to renovations, but generally lenders like to be confident that you've got funding in place to finish the job from the start, so I'd expect them to require the full deposit up front.

[delta9]

Hi Roundtuit,

Thank you for your post!

 

That does make sense to have both deposits upfront as you say.

 

I have enough money for the purchase deposit, but not enough money for the renovation deposit...

 

[1stBuildBob]

Hi, 

Wondering if I could get a unsecured loan to make up the total deposit. 

 

I know this is frowned upon with a regular mortgage but do you know if they would request evidence of where the deposit money came from? 

 

Edit, its me delta9 (I have another account on my mobile) 

 

 

 

 

 

Edited November 18, 2021 by 1stBuildBob

[Mr Punter]

I doubt they will be pleased with the unsecured loan.  Does your income easily cover the monthly loan / mortgage servicing costs?

[1stBuildBob]

Hi there, 

Yes it would easily cover it, approx 25% of my wages would easily cover both mortgage and loan. 

 

If mortgage was interest only then again that would be even easier...

 

Thanks