Mortgage Retention Query

BookLover_4

We've just been told by our mortgage advisor that it is likely our lender will take a retention from the value of the mortgage for the value of the works recommended - i.e. damp proofing, possibly replacing wall ties and some masonary repairs. We're awaiting quotes for the work needed but just say the price comes back at £10K and we negotiate with the sellers for them to reduce the price how does this effect the amount the bank are willing to lend?

We need to borrow £170K but say they will only lend £160K with £10K on retention and we manage to negotiate the price so we only need to borrow £160K (probably wishful thinking) will the bank still put a retention on this? Sorry for the long post but really confused. Some advice would be very much appreciated

holly_hobby

Once the D&T report comes back, the retention may be revised/lifted.

If not and there is remedial works, having the vendors satisfy the required works, would always be my approach.

Holly

kingstreet

The retention will still be applied if the works are considered essential by the surveyor. Even if the price is reduced by the same amount.

Basically, you'll need to increase your deposit by the amount of the essential repairs, then get the money released as soon as the work is done.

As holly said, best bet is to get the vendor to do the repairs and pay them the agreed price as long as it's valued at that amount once the repairs are completed.

BookLover_4

Thank you both that does make things clearer.Hopefully the vendors will be open to negotiations about the repairs otherwise we will have no choice but to walk away.