Please Help - it's complicated!

Tessmaz

Hi,

This may get a little complicated but will try my best to explain...

I am a first time buyer, living in a property which my father owns (the property I live in has no mortgage but my father re-mortgaged his property to fund the purchase of the property i currently live in!) I am wanting to purchase this property as my father has reached retirement age and could do with being mortgage free on his property plus would not get a longer term on his own property due to retirement.

I have been living in the property for the last 7 years and being paying the amount the mortgage would be (the re-mortgaged amount)...We had the property valued at £140000 and I only want to borrow £90k as my father is 'gifting' £50k deposit (the equity in the property) back to me...HOWEVER the property had a subsidence claim 5 years ago (whilst I was in the property) due to trees, and root damage and clay soil...the work has all be completed and i still have the insurace in my name for both buildings and contents...which i would continue if i brought the property! My concern is will a mortgage company lend me anything with a history of subsidence??

Please help!

kingstreet

Subsidence is more likely to be an insurance issue than a lending one. As long as the lender's surveyor feels the subsidence is over and he's happy the property is suitable security for the mortgage you should be fine.

Tessmaz

thank you, should I be honest with the morgage company and tell them up front about the subsidence rather than go down the line and pay lots of costly fees to be told they wont lend and end up loosing lots of money which i dont have to loose?

I would only be lending 90k and i know even with the subsidence I could sell the house at 100k (at a loss) so i dont think its of high risk to lend...I just want to purchase the property so its out of my fathers hair and he has no further stress and can simply enjoy retirement!

Thanks again

kingstreet

They won't commit to anything until the surveyor has been out and inspected it. If you tell the lender upfront, the mortgage will still be subject to valuation by the surveyor.

I would give copies of the paperwork to the surveyor when he inspects, so he knows what was done and when. I'd also obtain confirmation of continued insurability from your insurer.

A good valuer's report and the confirmation of cover should cover the lender's bases and make the mortgage straightforward.

Worst case scenario is you might be asked to obtain a structural engineer's report to establish the subsidence risk is now ended.