Un-Mortgageable Property - any ideas?

nesky99

My Mum died last year - leaving my sister and I a property in Cornwall... It's only got a small outstanding mortgate (20k) - but I'd really like to raise enought money to buy my sister out.

Like a lot of property in that area of Cornwall it's made of a substance called 'Mundic' - which has a high arsenic content - and since the property slow-down banks have stopped lending on any mundic houses. (It's perfectly okay - and the plot is highly desirable - sea views etc). I'd need to raise about 70k to buy her out - is a personal loan my only option?

I did go to a local broker down there - who offered a 25 year mortgage at 10.2%, but just seems a bit high. Anyone know if it would be possible to raise money on the plot value?

The house has recently been valued at £180,000 - with the plot being of similar value.
Thanks for your help.

mummytofour

70k on personal loan is a heck of a lot to raise, do you have a house of your own that you could re-morgage?

MortgageMamma

I will look into this tommorow for you and check with a few lenders. will help if I can.

nesky99

Thanks... I'd appreciate it. I currently have no mortgage - good credit rating and about 15k in savings I could plough into it, but the house will need some money spending to make it rentable. (I'm hoping to cover most of the mortgate/loan by letting it out).

AndrewSmith

http://www.mundichomeloans.com/

http://www.fineants.co.uk/mortgage-unusual-property.html/

These are the only people I am aware of who will lend on Mundic construction, however they charge something like 6% over base rate so it soulds like that's who you have already been quoted from.

Hope this helps

Andy

dander

I don't know if this is relevant, but on 'how to be a property developer' this week, the two guys were buying a house in cornwall with some kind of asbestos concrete on - I wonder if it's the same thing?

What they did was remove all the concrete - which basically meant stripping the house down to its timber-frame and then rebuilding. I wonder if this is something you could afford to do? If so maybe you could get a short-term loan for the length of the building work, then remortgage on a conventional mortgage once you've rebuilt in a more standard construction method.

Apologies if I'm way off the wall here, but I just thought I'd mention it since I saw it on TV only this week.

zappahey

I think I'd be questioning that valuation. If it's not mortgageable, then in practical terms it's just about unsellable on the conventional open market or, at least, it would have a fairly limited market of cash buyers. Does the valuation take this into consideration? Who did the valuation? Was it an estate agent or an independent surveyor?

I'm not suggesting that you should try to rip off your sister, but you really need to ensure that £180k is a realistic estimate of what the house would gain on the open market.

AndrewSmith

I think the main issue with Mundic construction is the association with Arsenic in the construction stages, and that the concrete is usually of a lesser quality that some other concrete constructions.

If you enter 'Mundic Construction' into google you get some very interesting sites regarding it.

Andy

nesky99

Thanks for everyone's thoughts. We've had a couple of valuations on the property and they've both been similar ... it's in a desireable position, the local council give favourable planning permission / as it's mundic, and in an environmentally protected area, so quite sought after... Eventually would like to rebuild ... but just can't afford it for a few years. Is a 70k personal loan just a silly idea?

silvercar

If you can get a mortgage at 10.2% why take a personal loan?

Do you own a proerty anywhere else, if so and it has equity in it, you could increase the mortgage on that to find the £70,000. That would work out a lot cheaper.

nesky99

Am a bit rubbish at finance lark ... I just presumed a personal loan would be better as I've seen rates of around 6 or 7% .... but would a mortgage .. even at 10% be better or offer more security. I haven't got another mortgage I could raise money on.