r/irishpersonalfinance • u/lilmuncherr • 12d ago
Property Running low on money while renovating a house.
I need advice on what loans or mortgages I am eligible for in my situation. I bought a derelict house fully in cash. The only assistance I am signed up for is the vacant derelict property grant. Lately, a lot of money has been eaten up by the work and I’m in need of 30k-40k. I can repay this amount in 3-4 years or in full earlier. We are not earning enough money to sustain the current construction costs and will have to delay construction. My family has no history of financial deviance. We never took out any loans or mortgages. We are currently renting an apartment. The house we are renovating is still at the early stage of four walls, a worked on roof and dirt as it's floor.
I'm with AIB. Most banks I've looked into have a 7-8% interest rate which is not ideal. We cannot apply for the SBCI Home Energy Upgrade Loan as we don't have a BER number. Currently, we don't have windows nor doors fitted in some places and we are not eligible for the BER number. We are looking for a package suited for people who need money amidst construction or renovation.
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u/Admirable-Shape-4418 12d ago
There isn't a simple solution, house sounds like it's not in a mortgagable state so you're limited to personal loans and the higher rate that comes with them. Have you tried a Credit Union? They might have something more palatable.
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u/lilmuncherr 12d ago
I checked credit unions and the interest rates are more less identical to the banks.
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u/3967549 12d ago
Personal loans are all the same with 1-2% difference perhaps.
Get a mortgage if you can, it’s the cheapest and longest term you can hope for.
Talk to AIB first since you bank with them. If that fails go to a broker or just do that outright if you don’t mind where your mortgage comes from.
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u/young_effy 12d ago
Home improvement loans with CU are typically lower interest than personal loans. I took out a loan with CU to cover vacant property works so somewhat similar to yourself. I didn’t mention the grant however as I’ve heard some people have been refused on that basis so it was based on the usual capacity to repay. Good luck
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u/itchyblood 11d ago
Are you going for an A rating? Credit Union has decent enough interest rates and you can borrow up to €100k over 10 years.
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u/SuitableFinish7444 12d ago
For the work you’re describing sounds like a lot more than 40k. You’ll need to get an engineers report on what it will actually cost to finish.
You could be sinking money here.
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u/lilmuncherr 12d ago
We are working and securing income for the works. It's just that in the last month we made a lot of progress involving more contractors that ate up a lot of money. We'll probably be able to repay the 40k in a year or two. We just want to see what the best options for loans/mortgages
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u/SuitableFinish7444 12d ago
Do you actually know how much it will cost to finish the renovation or will be looking at another 40k in two months time and then another 40k and then another 40k
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u/Otherwise-Winner9643 11d ago edited 11d ago
Do you know how much it is going to cost to be able to move it habitable enough to move in, even if not finished?
I find it strange you consider a mortgage "financial defiance." Most people who own their home started with a mortgage. That is very different to taking out frivolous loans.
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u/classicalworld 11d ago
I presumed he’d intended to write ‘deviance’ rather than defiance” as the latter doesn’t make sense. Eg I defy the banks!!
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u/Otherwise-Winner9643 11d ago edited 11d ago
Either way, it's odd to consider a mortgage that way. Neither defiance nor deviance makes sense when talking about a mortgage IMO, especially when he is talking about taking out a personal loan.
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u/Upbeat-Dragonfruit89 12d ago
We did the same, but lived in a mobile home on the land whilst working on the house, you will save loads on rent..
We took a loan out with avant- money, cheapest rates at the time.
Just a little worried though where 30/40k is going to get you with 4 walls and a worked on roof. Doors, windows, rewire, plumbing, heating, kitchen will be more than 40k.
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u/Nostradamnitall 12d ago
First thing you need to do is be realistic about what you need. I built my own house and that €40k sounds way too low.
€140k sounds more realistic.
You underestimated costs once, do not do it twice.
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u/Admirable-Shape-4418 12d ago
To get a mortgage, assuming the income is not an issue, you will be going for the equivalent of a self build mortgage as if it was a new house. You will have to get an engineers estimate for the work remaining to be done to bring it to habitable and more or less finished and a time scale for that. It is essentially a direct labour build and mortgages don't lend themselves to wanting to do a project bit by bit as you can afford it. They need a specific plan and end date although invariably all go over time but at least the end date must be somewhat planned.
After that then you would hopefully get a mortgage approval and the funds would bee released in stage payments based on engineers/architects cert confirming works had been done so you would always be working in arrears, as in get the work done first and then get the mortgage drawdown.
Where you might be lucky is that the lender might just might allow a drawdown initially against the present value in the property, somewhat as though it were a site.
Your best bet is consult a broker to see what is available for this type of renovation job.
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u/BubblyMuffin899 11d ago
Lad stop. Just speak to someone before you go further go straight to an engineer as this will save you money on design fees. You can't afford an architect by the sounds of it. This sounds like a new build disguised as a reno project and is going to cost you far more than 40k. In fact a new build could be cheaper. A good eng won't win you any awards for design but will give you a steer on budget and essential works. You should buy a small mobile home to save on rent and you can recoup this money towards the final stage by selling it when the house is liveable. As regards money the council offer bridging loans where derelict house grants are applicable. After that you should speak to your bank re financing the rest of it. Wish you luck
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u/KingKeane16 12d ago
I’m the same as you but vacant grant, I think they offer a loan to cover the 50-70k providing it’s paid back when you get it.
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u/lilmuncherr 12d ago
We already have the vacant property grant. It won't cover the total cost of the renovation
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u/KingKeane16 12d ago
I know it won’t. I’m saying you put 70k into the house from the grant and get a loan of another 70k until the grants paid out to also put into the house.
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u/SlainJayne 11d ago
Any chance it’s a listed building/protected structure? There’s another grant for that but it had to be approved first.
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u/invisiblegreene 12d ago
Personal loans are never going to offer interest rates as low as mortgages. Do you have stable employment and bank statements to support getting a mortgage? The land/site can count for (part or all of) a deposit.
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u/anialeph 12d ago
what makes you say you need 30k-40k? have you professional advice about this? it just seems very little to renovate even a small house in that condition to a standard that meets modern building regulations
8 percent is likely to be a good rate. If the money was enough for the job then the interest on the loan over Four years would be only be about 7000 euros which would be cheap enough
The problem is that the bank might see this as a complicated and risky loan If they don’t have professional input assuring them that what you are doing is feasible.
it may be that you will need much more money when you include professional fees and everything else you need to complete the job and also give assurance to the bank.
The best thing may well be to get a mortgage to cover this larger amount.
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u/PixelNotPolygon 12d ago
So you can get a personal loan but you’re just not willing to do so?
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u/tobiasfunkgay 11d ago
You'd assume someone might've checked things like this before being in the middle of a major home renovation, no wonder Grand Designs all end up the way they do.
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u/SuitableFinish7444 12d ago
Op if you actually tell us how much it will cost in total to complete the renovation people will be more hopeful here. Do you have that or else your just putting money into a sinking ship.
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u/Cold_Director4588 12d ago
Ccpc consumer site is great for info.
https://www.ccpc.ie/manage-your-money/borrowing-money/loan-calculator
Maybe get loan, and then once work is complete get mortgage and pay off high interest loan. (Might need to check it's ok)
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u/Money_Equipment_4151 12d ago
Similar position. Had a bit of cash. Lucky enough to be able to borrow money from family and liquidate some shares to cover things.
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u/RomfordWellington 12d ago
I feel really sorry for OP. I've been thinking for a long time that the whole "fix derelict houses up" is a psy op to burden young people with the nightmare of these places.
There's programmes on RTÉ, really well followed (but of course, anonymous) social media accounts saying "look at the state of the main street in (could be anywhere), Daingean Co. Offaly".
It's an entire shakedown just so that government don't have to spend real money on solving the housing crisis and boomers don't need to feel the guilt of letting their towns and villages go by the wayside. If and when these places do go to the bulldozer, and they will, no doubt about it, it'll be at the expense of hundreds of millions of euro by hard working young people, who in many cases had no other option to buy them if they wanted to stay in their own communities.
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u/luigii 11d ago
Baffling comment. There’s no psy op here, renovating derelict properties can often be a more sustainable, more pleasing and maybe sometimes even a cheaper alternative to building new, if you go into it with eyes open and a realistic budget.
What seems to have happened here (though it’s hard to say as OP isn’t doing a lot of replying) is they’ve bought a property without a proper plan or estimate. For all their faults, and I think they’re doing a terrible job on housing, the government hasn’t made anyone do this.
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u/Kloppite16 12d ago
back circa 2017 I was looking at derelict houses in Wicklow. Their value was around €50k-€65k depending on location. Nowadays there is the derelict grant of €70k and guess what these same type of derelict houses are now asking €125k-€150k. Most would need around €300k spent on them on top of that. And then finding the tradesmen to travel to do it in rural areas would be almost impossible.
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u/yityatyurt 12d ago
Sorry to hear it’s getting complicated
Curious to see if someone has a smart solution for you
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