Work being done affect mortgage

Jamjaw

Hi all,

I am a first time buyer and have found a property and agreed a mortgage in pronciple with A&L (3.99% 5 year one). We have instructed lawyers etc and valuation has been carried out by A&L. The vendor is in the process of doing some work to the place (work we agree with) and he is worried our mortgage company may become worried if they know about all the work (none of it is structural, he just wants to remove his kitchen etc, which we are more than happy with as I hate it!). Has anyone ever heard of any issues with mortgage companies doing things like this? When I applied for the mortgage I told them we were planning non structural works (although does need 1 wall putting up) and they seemed ok then, but am now starting to worry it may be an issue after all.

Any advice greatly appreciated!

Jamjaw

unite79

So the seller wants to remove the Kitchen - Is he going to replace it with a new one!

Jamjaw

No... We are planning to put a new one in. It is part of the agreement for the place.

A bit more info if this helps... £350k purchase price with a £150k mortgage...

unite79

Lendre will not lend on a property without a kitchen - Be a lot better if seller just left it in, and then you removed!

Jamjaw

Hmmm... He is the one who wants to take the kitchen as it is oak and he loves it (again, I think it is horrible). Will the lender really not lend on the property without this in? Would this mean we would need to either pay the vendor more or put a new kitchen in between exchange and completion?

unite79

Thats one option, or why not let him take the kitchen out after completion - It seems a very strange thing to do - ie rip out a kitchen before you A- Exchange (cause it will be harder to sell in the event you pull out ) B - For you to put a kitchen in before complating seems madnees also, cause he may decide against selling!

Jamjaw

He is planning to do it after exchange before completion. Which to me seems sensible. The reason he wants it is he thinks the oak is valuable (it is a solid oak kitchen), and we offered so far below asking (20%, with it already being cheaper per sq foot than all others we saw) that he wants to sell it on. How would the mortgage company find out about there being no kitchen if valuation etc is done befoire it is removed? Can/do they ask solictors (as there is an agreement with the vendor about this, done through lawyers) about any work being done?

SandC

I don't think it will be an issue considering you are borrowing less than half the value of the property. I think when you mentioned the vendor doing work of a non structural nature they would have questioned it then.

Put it this way - with the kitchen ripped out and nothing in its place would the property still be worth more than the £150k the lender is loaning you? Sounds to me quite substantially so.

Jamjaw

That is what I thought the case may be. Do you think it is worth my ringing them and discussing it or not?

unite79

In theory what sandc says makes sense - However, sense is not something Banks are prone to use - a property has to have a kitchen and a bathroom and be liveable for it to be mortgageable - without a kitchen it fails to meet this criteria - As to would the property be worth £150,000, property's that are CASH buyers only, do tend to go for SUBSTANTIALLY under market value!
As for the lender finding out - I would have thought both you and solicitor are duty bound to tell them - Both seller and buyer solicitors!

Jamjaw

So I guess you would suggest complete and have an agreement that lets him take the kitchen out post completion? Would the mortgage company complain about this?

Am getting worried now, although there must be a way to fix this.