If you’re negotiating delayed completion so that you can do refurbishment after exchange, if the purchase price is £65K and the refurb costs are £10K, but the value after works is £85K, can you apply for a mortgage against the full value (£85K) even if you’ve exchanged at £65K?
The biggest obstacle you face, is that at point of purchase, mortgage lenders almost without exception, base their lending on the LOWER of the purchase price or value. There’s nothing stopping you doing the work between exchange and completion, but it’s the purchase price that the lender’s valuers will be focused upon.
Is it possible to achieve? Definitely yes it is. Not necessarily 'no money down' (how can it be if you have to pay for the refurb), but you can borrow against the £85k value (in this example) and you can borrow 100% of the purchase price, or more, if enough value has been added.
How? By using bridging finance to purchase, then refinance onto a mortgage.
Will any bridger do? No, most will do exactly the same as mortgage lenders do and lend on the lower purchase price. Even bridgers that will lend on the value created by the refurb, will still want to see some of your own money in the deal.
However, there are a select band of bridgers that work with me on this strategy, as I have been teaching it for years under my Recycle Your Cash and Ninja Investor Programme brands. These specific bridgers will ignore the purchase price and lend on the end value.
To that end we have brokered 100% of the purchase price, sometimes a bit less and sometimes a bit more, depending on the value the refurb added, on a number of deals. The best we achieved using this strategy was 118% of the purchase price.