Mortgage approved with catches!

savage80

Hi there I'm hoping someone can give some advice. We have just bought a property which was on the market for £149,950. however we are buying it at a fab £135,000!
The mortgage advisor has confirmed a mortgage at The Coventry at a very low rate. We are putting down 15% deposit so we thought we were in a great position.
The mortgage company has since gone away taken 2 MONTHS to come back and say they are with holding 5k until we get particular work done on the house, non of which is structural, then they will give back the 5k. Our entire money has gone into the deposit to keep monthly payments down.

Our only option is to get a loan to pay the 5k plus extra to then do the work. Is this a sensible option (even though it seems our only option)

any adice would be great (if only we had rich parents!!!!!)

savage80

Forgot to mention there is not one else involve as we are buying it and the money goes to the government as the old lady died with no family and no will. So Lawyers are dealing with it all

Thrugelmir

Renegotiate the price for the property.

Property is only worth what some will pay for it on a given day. So is very subjective.

maninthestreet

What is the nature of the work the lender refers to?

savage80

We already negotiated and they dropped it from 140k to 135k

the work to be done

• damp on one wall but not rising!
• kitchen floor to be leveled out (survey shows nothing wrong just old!)
• repoint the back porch
• spray incase of wood worm

Everything need to do we would obviously get done eventually as it is going to be a restoration project as its stuck in the 70's and looks like nothing has been touch in years plus there is no heating so its goingto me damp doesn't mean its set in?

I'm guessing we're just gonna have to get loan and pay mortgage company the 5k and then crack on with the work boooooo!

kingstreet

Have you obtained reports and estimates and the £5k retention is based on them, or was that the chartered surveyors estimate of what might cost, assuming these "essential repairs" actually are essential?

Lenders usually ask for more detailed information, with inspections and reports carried out by those qualified, such as a qualified timber and damp surveyor for such issues. Did they do that in your case?

savage80

yes we had to have more detailed reports the only essential thing list was the damp to be sorted and spray the wood for bugs that was it nothing else came out major my uncles friend did the surveying he said its a good strong sound house but they still bl**dy want 5k thats why i'm proper confused! The quote for the damp and wood spray was a random quote from a company we have never used before that was over priced at 2k I/we know this can be done allot cheaper. Maybe this is why they want so much money

kingstreet

If the surveyor's suggested retention was £5k and the cost of the work when estimated was less, the reports should have been forwarded to the surveyor for him to decide if the retention should be reduced, or lifted altogether.

If a retention is held, you need to make up the difference to increase the deposit to enough to allow you to purchase the property. Once the work is done, you can then get the retention released, perhaps following a reinspection by the surveyor. If it only costs £2k to do the work, you can still get all the £5k released, as long as all the work is done.

wannahouse

is there any reason why they can't negotiate to pay to get the work done BEFORE completion, so the bank will pay out the full amount on completion, rather than going the retention route?

kingstreet

wannahouse wrote: »

is there any reason why they can't negotiate to pay to get the work done BEFORE completion, so the bank will pay out the full amount on completion, rather than going the retention route?

Probably the risk. Would you allow someone to start knocking your property around before they bought it.

I'd put it to the vendor like this;-

" I want to buy your house for the price we've agreed, but for me to do that, you are going to have to carry out these repairs required by my lender/surveyor. If you do that, everything can continue. If you won't, I have to offer you less, as there's a retention and I'm going to have to borrow from elsewhere to make up the shortfall with a higher deposit. Then I need the money to get the work done."

savage80

Great thanks for the suggestion and advice