Retaining Money

scrivomcdivo

We recently placed a bit for our first home. We applied for a 95% mortgage on £100,000 (agreed price) and received a AIP. Survey was sent out which recommended another survey. This survey did say though, should work be completed, property would be worth £100,000. A structural survey was completed and said £2000 worth of work needed. So, we have now agreed a sale price of £98,000.

Now, will our Mortgage Provider give us a mortgage of £100,000 and retain £2000 pending the completion of the recommended work or will they only give us a mortgage of £98,000?

silvercar

if the max they will lend is 95% I would think they will give you 95% of your agreed sale price of £98,000 ie £93,100!

MortgageMamma

Has the mortgage provider stated that a retention will be incurred on the mortgage offer? Unless you have had your offer it is not possible to know. Some lenders may well make it a condition of your mortgage that you have to work done within a certain timescale and then reserve the right to reinspect the property. Ask your broker to push for the offer and investigate this with your lender.

scrivomcdivo

I'm actually going with Nationwide.

I think they will offer us a higher percentage mortgage, but the interest rate will increase also. I thought that, if the survey valued the house as £100,000 with all recommended work carried out, the mortgage provider would lend you the sale price (£98,000) retaining £2000 and they then release this to you when the work has been done.

Does anyone know if Nationwide do this?