Unmortgageable flat over shop

kingstreet

yorkie1947 wrote: »

Kingstreet - With hindsight I agree my daughter & son-in-law could have done more checking themselves but they took everyones advise and used an independant broker. Surely at that point all the checking was in his hands.

That's the point I was making here;-

TBH I'd have phoned around before I submitted an application, myself.

I don't expect my clients to do my job for me. AFAIC I establish who will lend and do everything I can to avoid such a situation.

If we have to replace a case it's because of something unexpected which we could not plan for.

holly_hobby

An experienced broker/adviser will know that flats above commercial prems should ALWAYS be pre-placed before submission.

The issues are compounded by the fact that whilst it may on paper meet their lending criteria/receive UW prelimary sign off, the lender will ulitmately be guided by the surveyor, and if he/she deems that in their opinion it isn't suitable security for mortgage purposes, due to condition, business its located over and/or surrounding trading/area (relevant for lender onward sale on possesson), then you're rather stuffed, regardless of UW criteria.

Is it currently mortgaged ?
If so who is the lender ?
As whilst the current lender may not choose to re-accept this as new business, its a place to start.

But TBH, given the real issues they are having in sourcing a mortgage, ensure they consider how (as ACG has mentioned) this will affect their re-sale audience - which in reality may well be isolated to cash purchasers in the future.

My advice would be for they to walk away from this one.

Hope this helps

Holly x

yorkie1947

holly_hobby wrote: »

An experienced broker/adviser will know that flats above commercial prems should ALWAYS be pre-placed before submission.

The issues are compounded by the fact that whilst it may on paper meet their lending criteria/receive UW prelimary sign off, the lender will ulitmately be guided by the surveyor, and if he/she deems that in their opinion it isn't suitable security for mortgage purposes, due to condition, business its located over and/or surrounding trading/area (relevant for lender onward sale on possesson), then you're rather stuffed, regardless of UW criteria.

Is it currently mortgaged ?
If so who is the lender ?
As whilst the current lender may not choose to re-accept this as new business, its a place to start.

But TBH, given the real issues they are having in sourcing a mortgage, ensure they consider how (as ACG has mentioned) this will affect their re-sale audience - which in reality may well be isolated to cash purchasers in the future.

My advice would be for they to walk away from this one.

Hope this helps

Holly x

From what you say it seems to me that their broker may be inexperienced and took on the work without realising the complications.
The flat isn't currently mortgaged - it has been funded by a developer who has bought a number of empty shops in the town centre and refurbished them. This particular shop previously had two storeys, the ground floor is to remain retail space and is being bought by a cash buyer from whom my son-in law is going to rent (he trades in mens clothing) the upper floor has been turned into a flat (with separate entrance) which my daughter & son-in-law want to buy/live in.

kingstreet

If this is now classed as a "newbuild" flat, it will be even more difficult to mortgage, with some lenders unwilling to go above 70% or 75%.

Halifax definition of newbuild, for example;-

An initial occupancy/new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state and includes newly converted properties. These will fall into one of the following categories:

Newly built property.

Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken.

Newly converted property i.e. conversion of an existing non residential property, e.g. an existing mill converted into flats.
All lending decisions are based on valuation or purchase price (whichever is lower).

A property, either new or converted (as above), that has been tenanted through a 'try before you buy' or 'rent before you buy' scheme and is now offered for sale by the builder/developer.

Maximum LTV on new build properties (houses and flats) is 80% (65% if the scheme type is a second home loan or buy to let).

This just adds to the "flat above shop" issue.

squeekster

Going off track a tad i live on an estate in Stoke on Trent that have houses that were built for miners and are what are called schindler build homes. They found that steel used to reinforce the concrete was flawed and could(no 100% proof) but could corrode and weaken the concrete beams which make up the main structure of the house.

They are now deemed mortgageable but they are a decent sized 3 bed semi's and are in good condition in general and no house has had any problems thus far,the local council purchased one in an attempt to get it up to a mortgageable standard but spent £120,000 in total so this was a waste of time.

Half of the properties have been knocked down and rebuilt under an insurance scheme but if you purchased after a certain time you don't qualify,i currently live in one but want to move to one across the road as we like the area and are well settled here is there a broker that will lend money when others won't?

I currently own the property i live in outright but selling at this moment in time isn't an option as my dad lives with us and it's his home until he chooses other wise and we need to get away as our situation is becoming untenable.

So in theory i would have the cash to buy as i can sell mine when the time comes but in the mean time need to raise funds now,i would be paying off the mortgage as soon as the other house is sold.

Can anyone point me in the right direction?

Is there any kind of grant system that would allow me to rebuild?