Story of a self build & renovation project: how we helped James & David
In the latest in our series of self build and renovation blogs, here we look at an example of how mortgage funds can be used.
A lot of people can be forgiven for thinking a self build mortgage is all about a brand new build, but it is much wider than that. We call it ‘self build and renovation’ because it covers people who are carrying out conversions, renovations and knock down and rebuilds too.
Here’s how we were able to help James & David to renovate their recently purchased property to make it the home of their dreams.
James and David: renovation of a character property.
James and David had bought a beautiful property for £450,000, having taken out a residential remortgage with another lender. Their new home had many original features but had not been well maintained.
Once they had moved into the property and taken the time to assess the requirements, they decided the windows and roof, kitchen and bathroom all needed replacing and they wanted to add an extension too. The work would take at least 6 months and make the property uninhabitable for a time.
They needed to borrow additional funds in order to carry out these works, but couldn’t do this through their existing mortgage due to it falling outside a residential mortgage product. Instead, they would need a self build and renovation mortgage.
James and David spoke to their original mortgage broker, who assessed the available options and came to us.
As soon as James and David were shown as the property owners on the Land Registry, had their building regulations approval and plans in place we could assess their application. Then, having met all of our criteria and passed the necessary checks, we were able to lend the requested sum, which consisted of funds to repay the existing lender – moving the mortgage over to us – plus the additional amount required to carry out the extensive works.
The bulk of the money was used to repay the existing lender, moving the mortgage over to us so we had the registered charge against the security property. The remaining money, to carry out the works required, could then be released in stages as the build progressed and the value increased. Utilising these stage payments meant that James and David did not have to have the full amount upfront, thus not attracting interest on the whole sum, and could instead access funds at key stages of the renovation project.
The end result.
Once the works have been completed James and David will be living in their renovated and extended home, retaining the character of the property but with more space and upgraded home comforts. They will have added value to their property and made it fit for their requirements for many years to come.
Their self build and renovation mortgage will have served its purpose and they will now be able to switch to one of our follow-on mortgage products without penalty.
Photograph used is for illustration purposes only and is not the property featured in this article.