The 75% LTV Nightmare!

AHSmudge

Hi,

I am currently in the process of buying a property which was going so well until the dreaded survey! It showed up some needed work and stated that the value of the property was £10k too high. So...we had a builder around who said that we would need to spend £15k so we have resubmitted a revised offer price taking this in to account.

But...the 75% LTV nightmare begins. So knowing that we need £15K to undertake the work to the property to make it into the house we would want to live in we started to look at the at borrowing the same amount of cash from Abbey...but no! Of course that puts our LTV up to 78% and ruins our chances of a good mortgage rate.

So if we stick with the 75% LTV we only manage to get an extra £4k cash from the mortgage amount we borrow. That isnt going to stretch to £15k is it?! Now I am having a major dillema and questioning whether to pull out of the purchase all together and look for a house that is worth more money but needs less work. I will have a bigger morgage but will ultimately be better off!

What would you do? Take the hit and save up to do the work hoping the house will be worth the same as you have spent on it in the future or would you cut your loses and look for a new more expensive place?

Advice please!!! :eek:

Thrugelmir

If the financial aspects of the transaction trouble you more than the actual desire to buy this particular property. Walk away from the transaction. Wait until you can comfortably afford the house you wish to buy rather pushing up to the boundary with no room for the unexpected.

AHSmudge

Thanks Thrugelmir. We can afford the house, in fact our mortgage would be less and cheaper. We also do have some funds stashed for upgrades but we are not sure whether we should overhaul a house or spend the money to get one that is structurally sound and the right configuration (albeit may need some updating!)!! My desire for buying any house has been wained by the stress!

beccad

Does the work need to be done to make the place habitable? Or is it something that will need to be done fairly soon? Is the property actually structurally unsound? ie. could you live in the property and have the work done as and when you can afford it?

mlz1413

I've done up an entire property whilst living there but I was very motivated and my fella is a general builder so we could work evenings and weekends around work, but you have to want to. It is not for the faint hearted or someone who is house proud.

A couple up the road did the same thing but she was so stressed by the mess and dust she had headaches for 6 months, also her constant tidying up made the builders life difficult and it took much longer.

So decide what is important to you and buy a house you can afford, everything always costs more so being at the top of your cash limit is not a good start.

54druids

I presume you have to pay stamp duty on this house. Could you extend the purchase price by the amount of the stamp duty and get the vendor to then pay the duty. This would increase you LTV rate but obviously you will then have to add that to your mortgage

sjcollett

Do you like this place enough to make it your home? I understand your financial dilemma - but homes are not investments. They are places where you live, build memories and feel safe. If this house does not tick these boxes walk away.

poppysarah

Pay a lot less or don't buy it.
15k estimate from a builder PLUS all the nightmare of having work done...

Is it work that has to be done immediately or could be done over a few months?

Plenty more houses for sale.

theartfullodger

Sounds like you are in a financial position many others would envy... what good fortune!!

Sometimes we get what we want, sometimes we don't...

Cheers!

Lodger