Mortgage to convert two houses into one

red_car

Hello, I need some advice - I am struggling to find a mortgage company who will lend us the money to convert two houses into one, and then modernise. I think there are concerns over the title deeds and other potential complications. Any thoughts/suggestions?

DVardysShadow

In principle, there should be no concerns over title deeds, although in any specific circumstance issues may crop up.

It seems more likely that your problem is that you will buy 2 properties for £100000 each and get one worth £180000. So what you think is a 90% mortgage on £200000 turns out to be 100% mortgage on £180000. Would you care to indicate values and see what people make of it?

red_car

It seems the mortgage providers are unwilling to lend to enable is to buy the other property because when it is merged with the 2nd house the title deeds are transferred and security on both houses go as well. It is all a little confusing! How do people buy two houses and merge them together? Do you buy first then worry about converting later? Regarding numbers, one is worth 470 and other 300. Thanks in advance.

MortgageAdviser_2

Id have thought the title deeds would come into play as the lender has to lend against 1 property & 1 set of title deeds. In this case you are asking them to lend on 2 houses with 1 mortgage and 2 sets of title deeds. Have you thought of some short term bridging finance? Can be costly at 0.75% - 1.5% per month but Im not sure how much you are looking at borrowing & how much the end value you would be looking at.

MortgageAdviser_2

Bridging on that sort of value would be pretty steep then. To buy both houses and convert into one you may need to look at commercial finance instead of residential finance.

As I mentioned previously the bank has to lend against something and that will be listed in the title deeds as to what that entity is(the house, land garages etc etc). A mortgage is a secured loan against a property, so when you change that property, the security has essentially gone for the bank.

red_car

Thanks for all this. Maybe people just take out a normal mortgage to buy 2nd house and then merge deeds later on? Do you have to merge deeds, can you keep them as two separate entitities?

thomson180750

I currently have an existing mortgage balance of about £44,000 which is about £21,000 repayment mortage and £23,000 interest only. I am 61 and the mortgage is due to run for another 4 years, when I would have to find the means to pay off the £23,000. I intend to pay off some of the mortage now and I have about £5,000 to do this. My question is, "Is it better for me to pay the £5,000 against the repayment balance or against the interest-only balance?

Thanks

joedenise

Whichever has the highest interest rate, as long as there are no early repayment charges.

Denise

kingstreet

thomson180750 wrote: »

I currently have an existing mortgage balance of about £44,000 which is about £21,000 repayment mortage and £23,000 interest only. I am 61 and the mortgage is due to run for another 4 years, when I would have to find the means to pay off the £23,000. I intend to pay off some of the mortage now and I have about £5,000 to do this. My question is, "Is it better for me to pay the £5,000 against the repayment balance or against the interest-only balance?

Thanks

To get the advice you need, open a new thread rather than hijack another. As this is about knocking two properties into one, you won't get too many ideas on repaying different strands of a mortgage.

Thrugelmir

red_car wrote: »

Thanks for all this. Maybe people just take out a normal mortgage to buy 2nd house and then merge deeds later on? Do you have to merge deeds, can you keep them as two separate entitities?

The 2 properties as separate units will most likely have a higher value than a single property. That's the primary issue for lenders.

Ideally being mortgage free on one property would be the answer.

If you make one property then you there will only be one set of title deeds.

DVardysShadow

red_car wrote: »

Regarding numbers, one is worth 470 and other 300. Thanks in advance.

Regarding numbers:

• How much have you borrowed already [and on which one]?
• And how much more are you looking to borrow?
• And how much do you need to spend to knock them together?
• And how much will the finished property be worth?