Will lenders penalise us, as it looks we used our residential mortgage for a rennovation project?

Posted on 22 January 2013 by Aleksandra


Hello. We bought a property that needed renovating with a residential mortgage. We carried out the renovation work ourselves in 8 months. During that time we lived with friends in rented accomodation. We now found out that the value of the house we renovated went up in value and we can now afford to buy something else in better area? Would that be a problem for lenders that we didnt actually live in the property and now want to sell after 8 months owning it? I am affraid that they will suggest we bought in for investment purposes as it may look like it.

Aleksandra,

There is a possibility that lenders will take the view that you used a residential mortgage to fund a renovation project. However one of the benefits of coming to a broker like John Charcol is the strong relationships that we have with lenders that have been built up over nearly 40 years. 

A lot of what can do to help you, is really dependent on the exact figures involved, including the current, value, mortgage balance, and also the new figures for the proposed new purchase. 

I do think it would be worth having an initial discussion with one of our consultants to see how best we may be able to help you. If you'd like to do so, then please let me know and I'll arrange a mutually convenient time for one to contact  you.

Regards,

Simon

simon.collins@johncharcol.co.uk

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