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Lease too short for mortgage - how to manage through sale
property.advert
Posts: 4,086 Forumite
House has lease with 57 years remaining. Obviously cannot obtain mortgage but buyer and seller want to proceed.
Offer of £200,000 as leasehold made and accepted. Now buyer wants mortgage so requests vendor buy the freehold prior to sale.
Freehold cost is £10,000 plus legals.
How to proceed ?
Is offer raised to £210,000 for freehold ?
How much should legal fees be ?
Offer of £200,000 as leasehold made and accepted. Now buyer wants mortgage so requests vendor buy the freehold prior to sale.
Freehold cost is £10,000 plus legals.
How to proceed ?
Is offer raised to £210,000 for freehold ?
How much should legal fees be ?
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Comments
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Surely it should be a leasehold extension the buyer is concerned about? Is out definitely a house and not a flat?0
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We are in a similar situation- there are 99 years left on the lease of my property and the buyer is insisting on an extension before we exchange. We didn't dream there would be an issue with 99 years but the buyer obviously knows something about his life expectancy that we don't!
Anyway we are lucky that the local council is the leaseholder so it isn't going to be so expensive- BUT it is taking an eternity and we are living on 'tenter hooks' waiting to see if the buyer is going to stick around or leave us with costs we didn't anticipate.
We are only sticking with this buyer as it was a great offer and he was a cash buyer- we've already had one sale fall through due to a buyers mortgage issues :mad:
Good luck but don't imagine you are moving anytime soon!!!0 -
Depends, IMO, entirely on what was understood at the outset. If buyer offered knowing it was 57 years lease, then the extras are entirely down to him, If buyer did not know how long the lease was and offered having a reasonable expectation of a mortgage, it is for the seller to decide whether to stump up the extra or go back to market because buyer cannot proceed.property.advert wrote: »House has lease with 57 years remaining. Obviously cannot obtain mortgage but buyer and seller want to proceed.
Offer of £200,000 as leasehold made and accepted. Now buyer wants mortgage so requests vendor buy the freehold prior to sale.
Freehold cost is £10,000 plus legals.
How to proceed ?
Is offer raised to £210,000 for freehold ?
How much should legal fees be ?
Sensible thing to do here - which probably applies to the previous case too, is to negotiate a deal for the mortgage extension, make it part of the contract and leave completion of this deal to your buyer. Solicitors to deal with the mechanics of making the deal watertight for everyone.irwellgirl wrote: ».... We are only sticking with this buyer as it was a great offer and he was a cash buyer- we've already had one sale fall through due to a buyers mortgage issues :mad:Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
Not so long ago, I did a short lease (56) with Abbey. IIRC they require 30 years at the end of the mortgage term, so it's 55 years minimum for a 25 year mortgage term.
We plan to buy the freehold after two years and there's a decent premium v cost to be had on this property.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 -
Thanks for the help and comments.0
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