Selling a piece of land with a mortgage

liftboy

Hi everyone. I am 23 and have a mortgage on a property with my partner. We have lived there 2 years, We have been approached by the neighbour who wants to buy a piece of my garden. Long story short, the piece of land used to belong to the people who lived in the house before him but the people who lived in my house bought it. We have agreed a price and he is going to use one solicitor to act on both parties. The question is how does this work and will the lender allow this? We have a fixed rate mortage, also would we need to spend the money on home improvments or put it into the mortage? Thanks in advance for the replies.

pleasedelete

Think very carefully. Selling the land will probably devalue your house.

Why does he want the land? Can it be built on?

Have you had it properly valued?

opinions4u

You will need the lender's consent for this.

They may charge a fee. They have the absolute right to refuse. They may require you to pay for their valuer to go out again. They may require you to reduce the debt.

You need to call them and ask the question.

liftboy

To be honest the ground is no intrest to me, but as you say if will devalue my property and once its gone its gone. the piece of land is probably say 2 metres long by say 4 metres wide, And it is adjacent to my house, he wants to put a drive way down the side of us which i have also and i planned on fencing between. It does seem a hassle but he is willing to pay all fee`s etc. Am i dipping into my assets or actually putting myself in negative equaty? I have also done a lot of improvments to the house such as renovating a bathroom and bedroom and giving the house a new coat of paint.

holly_hobby

As already stated, the sale of the land may have quite a big effect on the value, or not really a huge amount (from what you have said I can't see it knocking 1000's off - but I am not a valuer/surveyor).

To this end the lender will want to ensure that you remain within their allowable LTV bands - if for example you creep over 75% ltv due to any reduction, there may be more complications (primarily thinking if you are on an interest only mge wout a repayment vehicle in place).

My first job would be to just sound your lender out with a general chat of "what if" - get a feel for their view point and a basic agreement in principle for you to start to put the wheels in process.

Fees, will obv be solicitors fees, land reg fees (re amendment to boundries on both properties) poss lender admin fees and others.

Hope this helps

Holly

pleasedelete

My brothers next door neighbour approached him offering 4k for a tiny piece of land. Great he thought and sold it.

Neighbour got planning (which he contested and lost) for a garage which actually is partly in front of his house and has taken light and also he now has a car visible from his window all day ( hard to explain it's an odd shaped estate).

I would imagine it has knocked tens of thousands off value of brothers house and made it much hardercto sell. He is really upset about it.

Moral be really clear whynhe wants it and maybe get written
Into the contract that nothing can be built on it.

Annisele

Chances are you won't be able to get one solicitor to act for both of you. Acting for both buyer and seller in a transaction is a clear conflict of interests - so if your neighbour has found a solicitor who is prepared to do both, I'd be concerned.

Agree with others; your first step should be a chat with your lender.

liftboy

Thanks for the replies.Me and the missus have decided against it now, we feel being in our 20`s we are unable to see what we would do with the land and also once its gone we will never get it back, also the neighbour will be driving his car`s down the side of my garden, so if anywork will be done on the car`s it will be next to my garden, instead of outside the front of his house.