A flat renovation cost estimate for the bank – how do you prepare one?

When investing in property we often turn to a bank for help. Financial support in the form of a mortgage can be obtained not only to buy a property, but also to renovate or refresh it. When applying for such support, you need to prepare a renovation cost estimate for the bank. How do you prepare it? Read our tips.

Mortgage or cash loan?

Some people decide to raise funds for renovating a flat with a cash loan. However, this option is more expensive, and the repayment period does not exceed 10 years. The advantage is that you do not have to specify the work or products on which the money will be spent. If you take out a mortgage for the renovation, the repayment period can be considerably longer and the interest rate lower. However, you must prepare a detailed renovation cost estimate for the bank.

What should be included in a renovation cost estimate for the bank?

The renovation specification should contain reliable and truthful information. It is worth thinking carefully about your plans for renovating the property. The estimate should include work permanently connected with the flat, for example:

• painting walls
• plastering
• renovating or installing wiring and plumbing
• fitting and assembly

Particular attention should be paid to furnishings. If we want to include furniture, household appliances or the electrical wiring in the estimate, we will not always meet the bank's conditions. Some items cannot be financed by a loan. The following items cannot be financed:

• lamps
• sofas, daybeds
• tables and chairs
• shelves for household appliances
• audio-visual equipment such as a television or home cinema
• a free-standing wardrobe

The matter of financing furniture is more complicated. A mortgage will be granted for built-in furniture – this applies to fitted wardrobes or kitchen units.

SEE ALSO – A mortgage for a flat and its renovation – is it possible?

When should you submit the application?

An application for a mortgage for renovating or refreshing a property can be submitted at any time. However, it is best not to leave this until the last minute. The formalities of submitting the application and preparing the cost estimate are time-consuming. In addition, the money does not arrive in your account immediately either. Remember to secure the funds before the renovation work starts.

Tips on the renovation cost estimate for the bank:

• When preparing the document you can use the construction cost calculators available online
• The cost estimate must be prepared accurately, and the calculations must be reliable
• In the cost estimate you can increase the final price of the renovation by 10%