Mortgage for an uninhabitable NAMA house - possible??

Tallulah-32

Is it possible to get one? A couple of houses which were originally going to sell for £250,000 back in 2008 are going for £120,000 however they're uninhabitable.

First fix electrics in, pipes for radiators etc and plumbing all in, windows and insulation etc but needs screed putting in, boiler, walls plastered, skirting boards etc, bathroom and kitchen.

Estate agent told us we'd need a £30k deposit which we've managed to raise. Went to a mortgage adviser who said they'd spoken to Halifax and they'd said we could get a self-build mortgage. We'd be lending 75% LTV. Mortgage adviser said income was fine - husband comes out with £2k a month and mortgage would be £620 (repayment) a month. We were going to use the £30k to renovate the property and make it habitable so instead of getting a mortgage for £90k we'd get one for £120k.

Got refused yesterday from Halifax as they said they wouldn't lend on an uninhabitable NAMA property. Really disappointed as we sold stuff and ran around to raise the £30k, dream house we'd never usually be able to afford and baby due in April next year and we need the space.

Just wondering whether you really need full funds to buy such a property. The mortgage adviser asked one of the residents how they raised the funds but the person wouldn't say (completely fair enough its personal).

Just wondering if anyone has experience of trying to get a mortgage for an uninhabitable property? The house we were looking to buy is the last available property on the development of a 8 houses. The houses were left by the bankrupt builder in various states but at least 4 were uninhabitable so maybe they all had £120k upfront.

Any guidance would be much appreciated please. Obviously just got to accept it wasn't meant to be.

Cheers

COOLTRIKERCHICK

Hi

I have seen these advertising for a very long time..

they seem to be a sympathetic lender lender,

havent a clue on their rates, or their policies etc, but it might be you looking to see if they might be the type of place you could ask for a mortgage.

http://www.ecology.co.uk/mortgages/lending/

saverbuyer

Maybe I'm picking this up wrong but reading your post it seems like you are trying to buy an uninhabitable NAMA property and use your "deposit" to renovate? This would make your LTV 100%. No lender is going to lend at this level. The only possibility I can see to do this is with bridging finance but it is very short term and very very expensive. I'm not even sure your earning would support this.

Lenders are rightly reluctant to offer mortgages on these types of properties. It would be difficult for them to assess the build quality for one.

If the house was going to sell for 250,000 in 2008, then with finishing costs of 30,000 you could end up with a finished house only worth 150,000. You haven't added any value. I would personally be looking to get the shell at a much much cheaper price. I would look out for it at auction. This type of project only really works for true cash buyers.

Try posting on the main mortgage board.

warmhands.coldheart

Any way you could direct us to a web site where we could look at them to judge if we think they are worth it??

£30,000 to get it habitable??? Is this a guess or have you had a builder tound to look at it. if your serious about it then it would be worth getting a proper quote/estimate. Also you may not actually need as much as you think as you could get a Basic Kitchen and Bathroom on finance (we got our's at a decent rate) meaning you could knock quite a bit off what you need. You might need to look at specialist Self Build Mortgages that may not be available through regular high street banks. Interest rates may be higher and you still need cash in reserve (or a builder who is willing to take the burden till the money's released) to do the work as they don't release funds till the bits of work are completed. Any give on the price if you contacted them and negotiated.

Tallulah-32

Hi

Thanks for the advice it’s much appreciated. I will try to put a photo of the houses up. The show-house in the street was advertised at £220,000 (and sold – though I don’t know how much for) and a couple of the houses were advertised at £185,000 which need kitchens and bathrooms etc. Got the £30k quote for works from the guy who has bought the same house next year. He said the costs will go up as he has decided on a designer kitchen etc but he got the basics for that amount. Don’t know him well enough to ask how he financed his property.

Estate Agent said NAMA won’t accept less than £120k. This is the last house to sell on the development and it’s a lovely house – always wondered why all the houses on the development weren’t snapped up within 6 months – probably finance issues.

Sorry re. 75% LTV I was regurgitating what the mortgage advisor told me last week – I’m not financially minded. I just wondered with all the alleged NAMA ghost estates in the north and south how people were getting finance for them.

Cheers

saverbuyer

You have no chance with a high street lender. No kitchen = uninhabitable. Sorry. There's three or four ghost estates around my way. They have been empty for years. They aren't selling.

The only possibility I see is as a commercial loan.

Don't listen to the EA, no high street lender will touch this. If they do it'll be with a 100% retention.

If they EA pointed you in the direction of this advisor I suggest you find a new one. You'll just end up throwing good money away on surveys, with no chance of a mortgage.

Tallulah-32

Thanks everyone really appreciate all your advice

Cheers

Mistral001

Just a general point. Looks like these are only bought by people with the full amount of cash.

However, you have to ask yourself why has this one not sold and others in the development have? What is keeping the cash buyers from snapping it up if it is such a bargain?

Tallulah-32

Hi

Just an update - I approached Buildstore (Ecology couldn't lend because the house has pvc windows) and there 'may' be a lender willing to assist with the purchase. The lender would provide 80% of the initial purchase price and we need to show that we have the monies for the balance and the works that need to be carried out to finish the house.

We need to get a quote from a builder for the works which need to be carried out to the house. The house next door to the one we want to purchase (which was also an unfinished new build) currently has a contractor in renovating the house. Therefore we could easily get a quote from him as to the outstanding works and costings (I know he may charge for this).

I just wondered how detailed the quote had to be to satisfy the lender? I've asked Buildstore but haven't received a response yet and ideally we want the contractor to come round this weekend and provide the quote. I just don't know what the may lender.

Any ideas please?

Thanks