mortgage 101 - mortgage for refurbishments - doddl

6 steps to fund refurbishments when purchasing a second hand home

May 27, 2023

When purchasing a second-hand home, it’s possible to get funding for both structural and non-structural works, provided that

  • the overall mortgage figure allows it
  • works add requisite value to the property

Here, our Home Buyer Helper team outline the simple steps involved in getting funding for refurbishments once you’ve secured your property.

Step 1: Discuss  figures

Discuss high-level figures with your mortgage advisor to establish the total cost, purchase price, and budget for the works.

Step 2: Get a quote

Get a quote for proposed works. For larger projects requiring planning permission, you will need to engage an architect.

Step 3: Get confirmation

Your mortgage advisor will then revert to your chosen mortgage lender to confirm that you wish to purchase and refurb a property, and set out proposed figures.

Step 4: Valuation

A valuation will need to be carried out to confirm the property value now, and the estimated value of the property on completion of the works.

Note, baks will lend based on the lower cost/market value

Step 5: Draw funds

You will draw funds by way of stage payments with stage payment certificates completed by your supervising engineer, architect, or surveyor – confirming works have been completed and value has been added to the property.

Note: if works are structural, your mortgage lender will require works to be supervised by a structural surveyor, engineer, or architect.

Step 6: Final valuation

Prior to the release of the final stage payment, a final valuation will be required and, if planning was required, a certificate of compliance.

Important to note when getting funding for home refurbishments

If you improve the building energy rating (BER) of the property when carrying out the works, you could be eligible for the new Green rates (requirement BER: B3+).

Don’t go it alone!

Your mortgage advisor can really add value in terms of advising you on lenders that allow stage payments, Green rates, and all the steps involved.

And don’t forrget; all doddl approved mortgage clients have access to our exclusive Home Buyer Helper service – our in-house property advisors and Chartered Surveyor, who can answer any questions you have about your search, or any properties on your shortlist.

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