Buying a Reposessed House - mortgage/ buying advice needed

Andrew_C_3

OK, found a bargain house locally that fits the criteria in everyway, here is the breakdown of my situation:

Me and my brother intend to buy in together
my income = £25k - only debt is student loan (12k) which i pay around £60 a month
my brothers = 22k - no debt
House has 3/4 double bedrooms over 3 floors
potential to rent a few rooms after me and my brother move in


the estate agent has said that it is a reposessed house and therefore that is why it is such good value (£197,500 when houses of its type are approx 237,000 locally).

Now i think that with an income of £47k a year a mortgage of £197,500 seems OK but without talking to an advisor I am unsure. We have a meeting arranged for saturday but I know there are a number of 'Mortgage Guru's who are here so I would really appreciate your help on clarifying this for me

The estate agent says there are 2 others are interested in the property who will be offering on it tomorrow. She has said that because it is reposessed anybody can view/ submit and offer right up to the contracts exchanging, is this right?

I have so many question but I think really I just need to understand this whole 'buying a repossesed house thing' so any tips/ advice/ do's/ dont do's etc etc would be great to hear

thanks

Andrew

Robert_Sterling

Andrew_C wrote:

She has said that because it is reposessed anybody can view/ submit and offer right up to the contracts exchanging, is this right?Andrew

Not only is that correct but it is legally the case that when a property is repossessed the person repossessing it MUST accept the best offer which in such a case means the HIGHEST genuine offer.

Doozergirl

Though I'd wonder how she KNOWS two people are going to offer tomorrow?

Keep as low as you can with your offers as you might have to keep some in reserve for rival bids. Move as quickly as you can towards exchange to reduce the chance of other offers; find a decent solicitor!

payless

Will you have a deposit ? Repo's often need work, so you might be required to have deposit and enough to cover the work if urgent

Does it have just one kitchen and an obvious main bathroom or does it look like its been rented as flats

Houses rarely sell for less than their actual value

Andrew_C_3

payless wrote:

Will you have a deposit ? Repo's often need work, so you might be required to have deposit and enough to cover the work if urgent

Does it have just one kitchen and an obvious main bathroom or does it look like its been rented as flats

Houses rarely sell for less than their actual value

The house is as new (no more than 3 years old) and the kitchen etc. is in A1 condition. Visually the property looks fine (wouldn't like to say for sure without having a survey carried out). there are no locks on doors so not sure about renting. One main bathroom and bedroom 1 has ensuite

With regard to deposit, we will be looking at 10% max.

clutton_2

""House has 3/4 double bedrooms over 3 floors potential to rent a few rooms after me and my brother move in""

if you have a three storey house and you rent it out to others who are not related to you, you will need to register it as a HMO (House in multiple occupation) with the local housing department of the council. Do a search for HMO on here and also on https://www.singingpig.co.uk to discover the huge bag of worms this will open up to you. IF you read all these links, and decide to ignore the 2004 Housing Act, (which includes these regulations) you will risk a fine of £20,000 - several landlords have already been fined. Its a hugely complex area.

Andrew_C_3

thanks clutton, I will check that link out

Rick62

HMO won't apply if you live there and just rent out one or two rooms.

Mortgage should be fine at a multiple of about 4 and 10% deposit you should have a choice of Fixed or Tracker rates around 5%.

clutton_2

if you rent to a "lodger" then different rules apply - my most serious advice is to join the National Landlords Association - at least for the first year of your landlording - (you may also get much cheaper house insurance) - landlording is legally complex, so, get all the help you can. NLA has a fabulous legal help line, you get a magazine which keeps you up to date and the availablility of local meetings at which you can meet and get suupport from other landlords. if you buy a tenancy agreement off the shelf and do not know its origin, you will not know if it is a good one until you get into trouble, and then the judge will tell you if you have lost or won the case - and then you will know if you have a good agreement or not.

if you choose to let loders in without tenancy agreements you are putting yourself in a very risky legally-unprotected position.