Auction bought property...mortgage hell!

Thrugelmir

What's the basis of the £160k valuation?

At £50k the property shouldn't have reserve at auction and would have been withdrawn.

Is the property currently inhabitable?

WestonDave

As above - the house is only worth £160k if someone is willing to pay that in an open market - as it was the only figure they could get for it was £50k which indicates its current value. Whether that is because of its current state or other issues, only you will know but the lenders are quite correct in treating it for mortgage purposes at its sale value because the point of a mortgage is that its a secured loan which can if necessary be repaid by selling the underlying asset (house). You are also not going to get a 100% mortgage as the lender wants you to share the risk hence the required 20% deposit. I'm guessing that from the £70k+ you want to borrow that you will be wanting to spend £30k+ (including your deposit money) on doing it up. You might therefore be better off taking the £40k mortgage on offer, using most of that to do the work with the rest paying off any urgent loans to family. Once its back in a saleable condition you can re-address the mortgage situation.

kingstreet

Why are you only being offered 80%?

What's the breakdown of the use of the funds requested?

You need to provide a lot more information if you are going to get meaningful help on this issue.

jones_the_cat

The building is grade 2 listed and needing some work. There are two flats in the upstairs and a horse and coach house downstairs and has a bit of land with it. We are currently living in 1 of the flats. (Yes it was an impulsive purchase.) One of the banks we spoke to didn't know how to categorise our application... saying we were a re-mortgaging first time buyer. There is a demand for rentals round this area. Flat 2 will be let or holiday accommodation...eventually!
I will approach an independent mortgage broker.
Thanks again.
Borrow 70k. 47k to family. 23k to care and repair.
The building was bought by the previous owner 3 years ago for £163k. He obtained planning permission to make it into 4 flats (Still valid) ...but his business failed and his properties were repossessed and auctioned off 100+ miles away, with no obvious local advertising

jones_the_cat

The building was bought 3 years ago by a local businessman for £163 000. He obtained planning permission for 4 flats. (Still valid.) When his business was closed/received this building, one of several large assets was sold, via auction 100+ miles away. There was no obvious local advertising in this area. (Another of his buildings which cost £500 thousand to build, sold for less than £150k.)

ACG

oooo this is a lot more complicated than "bought a house for £50k".

You really need professional help with this. You need to go and see an actual mortgage advisor as help on here will be fairly limited due to the complicated nature of it.

Fire_Fox

Completely different story to the first post now, you definitely need a broker, you probably need a business not a residential mortgage or some strange combination. £23K may well not touch the sides for a listed building, certainly not if the flats need work as well as the structure. Have you got a business plan and done proper costings? Do you understand what consents are needed from the council for listed buildings?

Thrugelmir

jones_the_cat wrote: »

The building is grade 2 listed and needing some work.

Therein lies your problem I suspect. Does the work to date comply with the Consent granted? Before buying the property did you obtain a quote for the cost of works to complete?

G_M

Thrugelmir wrote: »

Therein lies your problem I suspect. Does the work to date comply with the Consent granted? Before buying the property did you obtain a quote for the cost of works to complete?

Yeah - building work on listed building can be expensive. Permissions can be difficult to get. Previous works if not compliant can necessitate undoing/re-doing.

We bought a £160 thousand pounds property for £50 thousand,...

As others have said. No you didn't. May well be that Developers looked at the property, evaluated the cost of re-doing work, and undertaking new work, and decided it was only worth £45K, hence you got it for 50.....

orcocan

sorry for being blunt but you clearly have no idea what you're doing and are completely out of your depth. You need a business plan and strategy to turn this around. Getting a mortgage is probably not going to solve anything.
My advice is to sell today, if it was a real bargain as you say you should easily find a developer or someone who's willing to buy it perhaps for a small profit.
Finally you're deluded if you think the property is actually worth 160k today, if that was the case you'd have a queue of potential buyers waiting outside your door.
Good luck.