Mortgage when less than 6 months from last sale

kmmr

Hi,

I am looking at buying an auction property with a mortgage. I am hoping to get the full offer in advance of the auction but time is very tight.

My solicitor has said there may be a problem as the property was last sold in November 2011. Can anyone explain to me why this is a problem? I will speak to the mortgage company on Monday, but I was hoping someone here would know what type of problem is may cause.

The lender is Platform. I had a full offer from them on another property which fell through, so it's just a case of a new survey, but of course if they have this 6 month restriction then we wouldn't be able to go ahead, as no-one else will be able to make an offer in time.

Thanks

SusieWoozy_2

I've heard of this before. Lenders don't like to/ probably won't lend on a property if it's less than 6 months since it was last sold.

Dave_Ham

Bad news I am afraid, almost every lender now has this 6 month rule in place and if they do not there rates are heavily reflective in this..

Fair play to solicitor telling you this in advance though

ACG

You could probably get briding loan, but as dave said the rates wont be the cheapest. It would be a means to get you what yoru after though.

gilps123

Is there any exceptional reason that a lender would waiver this rule..

we are in a chain and now heard that our buyers have been in less than 6 months.. now this is due to them moving in and after 6 weeks he was offered a new job in a different location.. due to the commuting distance they put the house on the market for £1k less than they paid.

we have now got to point of exchange and their buyers solicitors have now started asking about it..

I understand it if they were selling to make money but they are clearly not . they are moving to re- location..

i would like to hear peoples thoughts on this please as we are at the point of heading for a padded cell

J

kmmr

Thanks all.

I am lucky to have a good solicitor - I only mentioned it to him in passing as I wondered if he could find out why it was being sold so quickly.

Presumably if I get a bridging loan, it will have to be for 6 months (plus as long as it takes to register the property) which would be very expensive. The inability to get a mortgage might be why it's up for Auction - but I don't really understand why they just don't hang onto it for a few months.

I'll cross my fingers and see what the lender says on Monday. At least if I know now it's before I pay for the survey.

Thrugelmir

gilps123 wrote: »

we have now got to point of exchange and their buyers solicitors have now started asking about it..

Did you buy a property at auction without discovering if it was mortgageable first?

I assume therefore that you are in danger of forfeiting your deposit.

Am I on the right lines?

kmmr

Thrugilmir there are two situations sort of merging here.

I (kmmr) am buying at auction - and am still pre-auction so am making sure I CAN get a mortgage before making an offer. I haven't paid the deposit yet or committed. I am trying to get everything in order beforehand.

gilps123 is presumably in a normal chain, so isn't going to lose a deposit, but one of the people in the chain has just run into the same problem.

guesswho2000

Not sure if it's the same, but I've just been through a similar situation with Nationwide, something to do with sub-selling rules as a way of the seller circumventing stamp duty, but it went through fine.

I think they're under a legal obligation to make sure the seller isn't evading tax, which involves some additional checks. It took them less time to sort this out than obtaining a reference from my previous property, so it's unlikely it'll cause you much issue unless there is an actual issue, rather than just a check being made.

kmmr

Thanks all. Platform have come back and said it was fine, but they would only value up to the price it was last sold at, which is fair enough.

From research it looks like people sometimes do this by inflating the vaue o the property and getting ever larger loans against a low value property. There has to be collusion between the buyers and sellers, and probably with a mortgage broker and/or a surveyor. So I think I can easily show I am not associated with the seller.

I was hoping for an excuse to step away from this purchase though! I'm nervous of going to auction, but I suppose I should give it a go. Anyone have any additional advice on what to take care about before an auction?

Thrugelmir

Have a budget and stick to it.

Don't appear to be an eager bidder.

Have you viewed the inside of the property?