Are you in the market for a fixer-upper? If so, you may be wondering how you can get a mortgage for a home that needs some significant repairs. It's not impossible - in fact, several lenders will be happy to work with you on a fixer-upper mortgage.

We’ll go over the requirements and the process involved in securing a mortgage for a property that needs some TLC - including what to expect and how to increase your chances of approval.

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What Is a Fixer-Upper?

First, let's start with the basics. A fixer-upper is a property that is being sold for below market value and needs some work done to it. This can be significant work, like a new roof or repairs to the foundation, or cosmetic work such as modernising the interior. The kind of lending you’ll need will depend on the severity and scale of work required on the property.

How Do Fixer-Upper Mortgages Differ from Standard Mortgages?

A fixer-upper mortgage is not the same as a regular mortgage. In fact, there isn’t a product called a “fixer-upper mortgage”, nor a product called a “buy-to-renovate mortgage”. Instead these are umbrella terms used to describe lending that allows you to purchase a property and pay for renovations whereas a standard mortgage only pays for the purchase of a property. This is why the approval process can be more difficult for fixer-uppers.

The kind of mortgage you’ll need for a fixer-upper will depend on your intentions with the property and extent of the work required.

Normal Mortgage with Plan to Remortgage

If you want to purchase a property that just needs some cosmetic repairs, is habitable and you intend to live in, you could purchase it with a standard mortgage then remortgage once your introductory deal period is over after 2/5 years. Remortgaging will enable you to release equity and fund home improvements, thereby increasing the overall value of the property.

Remortgage/Further Advance on Existing Property

A remortgage or further advance can be used to raise cash for a fixer-upper by releasing equity from an existing property. A remortgage is where you take out a new deal with a new lender on an existing property. A further advance is like a top up of your current mortgage – you stay with the same lender but borrow more money at a different rate than your existing mortgage. Both of these options can be cheaper and simpler that bridging or development finance.

Whether this option is suitable for you will depend on how much equity you can release from your existing property and the extent of the work required on the new property.

Bridging Finance

A bridge is a short term secured loan for projects with a quick turnaround. It’s typically used to “bridge” the gap between the purchase of a property and approval of a standard mortgage. It can be used to buy uninhabitable/unmortgageable properties and/or properties sold at auction. Bridging finance is only available from specialist lenders and it comes with higher rates and deposit requirements. You typically don’t stay on a bridging loan for more than a year or 2. Once the work on the property is completed, you would remortgage onto a normal, cheaper product or sell the property.

Development Finance

Development finance is a secured loan used for extensive work on a property you intend to sell or rent out – e.g. turning an office building into a block of flats to be let out. It’s a longer term solution than bridging and is offered for up to 3 years.

Types of Mortgages Specifically for Buy-to-Renovate Properties

Bridging and development are often suitable options for buy to renovate projections.

In addition to these, there’s a product that has been introduced in the last few years specifically for buy-to-let renovations called a refurbishment buy-to-let. The main benefit of a refurbishment buy-to-let is that it makes exiting the bridging loan and securing a new normal deal seamless. You don’t have to worry about remortgaging onto a new buy-to-let deal with a new lender when it comes time to exit the bridging loan, instead you simply go from the short term finance onto a new normal mortgage deal with the existing lender once the work is complete.

Is It Difficult to Get a Mortgage on a Property that Needs Fixing Up?

If you want to take out finance on the property you intend to fix up, rather than remortgage an existing property to release funds, you’ll require a bridging loan or development finance.

You’ll require a broker like John Charcol to secure a bridging loan or development finance as these kinds of borrowing are only available through specialist lenders who work through intermediaries.

These finance options also tend to be a fair bit more complex than standard mortgages, so it’s important to get expert advice from an experienced broker like John Charcol. We’ll be able to advise you on the products suitable for your situation, the property in question and the criteria you need to meet – e.g. affordability, deposit requirements and more.

What Is the Best Mortgage for Flipping a House?

The best lending option for flipping a house will depend on your situation, your intentions and the work required on the property.

A remortgage or further advance on your existing property to release equity, or a bridging loan would be the most cost-effective ways to purchase and flip a home.

Things to Consider When Buying a Fixer-Upper

There are a few things you should keep in mind when you consider purchasing a fixer-upper.

Get Professional Opinions

It's a good idea to speak to an expert and get them to look at the property before you make an offer. This will help avoid making a mistake that could end up costing you a lot of money.

You should also consider the market value of the property. It's important to make sure you're not paying too much, especially if it does need some work. A professional appraisal can help you determine the fair market value of the home.

Be Realistic

It's critical to get a clear idea of what needs to be done and how much it will cost. Being realistic will help you set a budget and avoid overspending on the property.

Get a realistic idea of the cost by asking several contractors to provide quotes for the work needing to be done. Consider timelines as well — it's important to factor in contingencies and unforeseen delays.


You should also think about how long you're willing to spend on the project. Fixer-uppers can take a long time to complete and there's always the possibility that something will delay the process.

When setting a timeline for the project, be realistic about how long it will take. Don't rush the process, as this can lead to unnecessary mistakes. Experiencing delays due to an unrealistic timeframe adds stress and could lead to additional issues.

If you're not sure how long the project will take, ask a professional for their opinion. They'll be able to give you a realistic timeline to complete the work.

Consider the Costs of Financing

Fixer-uppers can be expensive, so you'll need to make sure you can afford the monthly payments. You should use a broker to compare mortgage rates, terms and lenders to find the best deal.

Don't Forget About Planning Permission

If you're planning on doing major renovations, you'll need planning permission from your local authority. This can add to the cost and timeline of your project, so make sure to factor it in.

Examine how easy it will be to get planning permission for the home. If you want to make significant modifications or are considering purchasing a listed property, you'll need permission from your local government. It might take up to 12 weeks for the council to rule on your application after it's submitted to allow neighbours to have a say.

A lot of small renovation projects don't need planning permission, so bear that in mind if you want to get started right away.

Consider Your Project Management Options

Decide how you're going to manage the project: you can do it yourself, hire a general contractor, or use a project management company.

Each option has its advantages and disadvantages. Doing it yourself gives you complete control over the project but will also require more time, effort and knowledge. Hiring a general contractor will be more expensive, but will save you time and hassle. Unless you're using a project manager, you'll need to oversee the contractors and work being carried out.

Using a project management company is another option if you don't want to oversee all the details yourself. A project manager will deal directly with contractors, saving you time and energy. This option can also help you stay on budget and schedule.

When you make this decision, you should consider your own set of skills. If you're not experienced with in-home repairs or construction, it might be best to leave the project to someone who is. This will help you avoid making mistakes that could end up costing more in the long run.

Prepare for the Unexpected

Even if you've done your research and know exactly what needs to be done, there's always a chance that something will come up that you didn't anticipate.

For example, you may find that the property needs more work than you originally thought. It's important to have a contingency fund set aside in case something like this happens. It's usually recommended to set aside 20% of the purchase price for unexpected costs.

Older Houses and Hidden Problems

Older properties often have hidden problems, such as asbestos, mould and outdated wiring. If you suspect there might be a problem, get it checked out by a professional ahead of time.

If you use the wrong renovation techniques when working on an older property, you could cause extensive damage. It's important to do your research and consult with experts before starting any work. Subsidence issues can also make it harder to get buildings insurance on older properties.

Old buildings often have outdated and potentially dangerous wiring, so you may have to rewire the entire property. This can be a costly process — make sure you factor it into your budget.

How to Increase Your Chances of Getting a Fixer-Upper Mortgage

There are several things you can do to increase your chances of securing a mortgage for a fixer-upper:

Set a Realistic Budget and Plan

It's important to have a realistic idea of how much money you'll need to complete your renovation project, as well as what kind of return on investment you can expect. This will help you negotiate with lenders. They'll be more likely to consider lending if you have a solid plan in place.

Save Up a Larger Deposit

The amount of deposit you’ll need will depend on the property, lender and type of loan you are applying for.

  • The minimum deposit for a standard residential mortgage is 5% - 10% of the property’s purchase value.
  • Most lenders will require a minimum deposit of 25% for a bridging loan.
  • For a development loan, each lender will work out the deposit differently, so it’s best to ask your adviser what to expect.
  • You don’t need to provide a deposit with a remortgage as the equity in your property acts as your contribution.

Overall no matter the product, the bigger your deposit is and the lower the LTV, the better your chances of securing a more competitive deal.

Get a Professional Valuation

Before you apply for a mortgage, it's a good idea to get a professional valuation of the property. This will give you an accurate estimate of the property's value for mortgage application purposes.

Keep a Good Credit Profile

Your credit profile is one of the most important factors in determining whether or not you'll be approved for a mortgage. If you have adverse credit on your file, you may still be able to get a mortgage, but may find your pool of options limited.

Make Sure You Can Prove Your Income

Lenders will want to see proof of income, so make sure you have all the necessary documentation in order. This includes tax returns, pay stubs and bank statements. If you’re self-employed, you may need to provide 3 years' worth of tax returns to be considered for a mortgage.

Talk to a Specialist, Independent Mortgage Broker

Specialist mortgage brokers have access to a whole market of lenders and mortgage products. They're therefore more likely to be able to find a lender who's willing to offer a more competitive rate for your situation.

At John Charcol, we’re an independent, specialist mortgage broker with over 45 years of experience in getting mortgages for all types of properties, including fixer-uppers. We can help you find the right mortgage for your needs, guide you through the application process, and get you the best deal possible. If you're looking to get a mortgage for a fixer-upper, give us a call today on 0330 433 2927.

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