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not suitable for mortgage or 100% retention
maryjane01
Posts: 456 Forumite
How likely are either of these 2 things?
We are looking at buying a house at auction this week and will need a mortgage. We are getting a full survey done today, however talking over the phone with the surveyor yesterday, he said there is a chance the mortgage co (not a mortage survey we are getting done yet) could put a 100% retention on it.
How bad does a house have to be to be non mortgageable, or in what circumstances would a 100% retention be applied?
The house has a subsidence claim going through, the report for the insurers classifies it as 'slight' (greater than 1mm, less than 5mm cracks), and requires a drain survey and if that is not the cause it will be the trees (most likely drains I think though).
It is executors selling the house, so it is in a poor state, will need full rewiring etc. We are anticipating a retention, but seriously how likely is a full retention?
I am slightly worried we are paying an !!!!! covering scare mongerer today and we won't get any useful information from the guy.
We are looking at buying a house at auction this week and will need a mortgage. We are getting a full survey done today, however talking over the phone with the surveyor yesterday, he said there is a chance the mortgage co (not a mortage survey we are getting done yet) could put a 100% retention on it.
How bad does a house have to be to be non mortgageable, or in what circumstances would a 100% retention be applied?
The house has a subsidence claim going through, the report for the insurers classifies it as 'slight' (greater than 1mm, less than 5mm cracks), and requires a drain survey and if that is not the cause it will be the trees (most likely drains I think though).
It is executors selling the house, so it is in a poor state, will need full rewiring etc. We are anticipating a retention, but seriously how likely is a full retention?
I am slightly worried we are paying an !!!!! covering scare mongerer today and we won't get any useful information from the guy.
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Comments
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It's at auction because it's a money pit.
Find another property.0 -
Is it insurable?
There's no point spending hundreds on surveys if you get to completion and find you can't insure it. Start with a good independent broker, not comparison sites or the likes of Direct Line. You'll probably need a specialist firm.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Mortgage companies work out their loans on risk. The level of risk in loaning money on this property is obviously too high for them to provide a mortgage on. This often applies to old run down properties, those of non-standard construction, those with stuctural problems etc. They need to know that even if you do nothing to repair/preserve or renovate the fabric of the property, that they would be able to recover their loan by selling it again in its current state. On balance, they have ruled this would not be the case on your property, so do not lend, or would agree to lend with a retention that you would get the money when the house is substantially renovated to their approval, to increase its value to a level where their risk is minimised.
When we bought our current home in '93, our mortgage withheld a retention of £25K, as it needed major work. We were able to apply for this additional money to be released, but in fact, we managed to scrimp and save and did the work in stages as we could afford it, so in the end we decline the retention, and therefore actually reduced our borrowings buy that amount.
Sounds like the property has been put in auction as they know it will never sell on the open market. Would more likely appeal to a cash buying developer who would flatten it and build new.0 -
Currently trying to find out if it is insurable.
Werdnal, what % of the loan was the £25K retention?0 -
maryjane01 wrote: »Currently trying to find out if it is insurable.
Werdnal, what % of the loan was the £25K retention?
Our total mortgage application was £45K.0
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