The vast majority of homes sold in Ireland are second hand homes, not new builds. Much of the stock that comes to market can be probate or ex rental and others also may need works to retrofit to make them more energy efficient or suitable for family living.
Timing wise you might want to carry out works at time or purchase or live in the property and see what you would like to do over time.
- Considerations if financing works at time of purchase –
Banks will lend up to 90% of the value of your home on completion of works. You will need to get a costing for proposed works and this will be submitted to the banks valuer who will confirm the value of the property now and the estimated value on completion.
Funds are released for purchase and then by stage payment for works.
If works are structural you will need to have a surveyor, engineer or architect certify them.
At doddl, we can help you to secure a mortgage that includes the cost of of refurbishments.
- A mortgage top up post purchase
If you are living in your home and want to carry out home improvements in general a bank will look to top up your mortgage once they can see a year of satisfactory repayments and provided there is value in the home. Max lend again to 90% loan to value.
As part of the mortgage top up you can also look to review rates – one in every 5 of our clients at doddl who switch mortgages also release equity for home improvements.
Our aim would be to get the overall mortgage on a lower rate so your repayments remain manageable.
How improving the energy rating of your home could lead to a lower rate and repayment-
As an example – a client with a Non Green rate with one of the main banks in Ireland –
Mortgage €250,000, less than 80% loan to value, non Green rate as BER is C rate offered 3 year fixed 4.2%. Mortgage term is 30 years, repayments are €1,223 per month.
Looking to release equity to improve BER from C to A €50,000
Total new mortgage €300,000.
BER A, 3 year fixed rate 3.1%, mortgage term still 30 years, repayments are €1,281 per month.
So even though you have borrowed €50,000 more, the fact that the Green rate applies to the full mortgage means cashflow wise you repay marginally more €58 per month more.
To note however this is just on a cashflow basis, you still need to consider that your mortgage amount owed will increase if you refinance.
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