Withholding funds

Cobweb1003

I am buying a repossession house for 125,000 I have 100,000 to put down on it, I wanted a mortgage for 60,000 to cover house updating the woolwich have done a survey and said that no money shall be offered until the timbers are treated.
How can I possibly do work on the house when it's not mine yet, should they not just retain some money until the work is done?

Thrugelmir

The Woolwich appears to be saying that the property is unmortgagable in its current state.

Cobweb1003

Should they retain some money rather than refuse a mortgage totally, they said that it is worth 125,000 now and when the timbers are treated then it will be worth 128,000 so why not retain 3,000 until the works done, can I fight this?

kingstreet

You could ask them to appeal the valuation, but TBH I would not hold out much hope.

The surveyor does not view the property as mortgageable, but has valued it as £125k in current condition?

That's unusual for a 100% retention. Normally they would not value it in such circumstances.

At least check it isn't an error.

witchy1066

Hi OP and Kingstreet

we are in a similar situation, the property we are hoping to buy has been valued at the price we agreed with vender BUT the lender are not willing the offer a mortgage on it until the vender has work done,

which is very confusing as we can not negotiate with vender because survey says " in its current condition the property is valued at ££££££" which is the agreed price , we are 80% LTV

ValHaller

Assuming there is no error, the only option is to make a conditional exchange of contract, subject to mortgage, negotiating with the lender a route to approval of remedial works and have the vendor execute the work.

witchy1066

in my case definitely no error, seems strange though, we even offered to up the LTV but our broker said she had put every option to the lender and they said no,
they are quiet happy to give us a mortgage for the required amount just not on the property we want unless vender addresses a number of issues.
we are thinking on doing as you have said ,ValHaller , seems the ball isin the venders court.
its a bit contradictory though don't you think , the surveyer is saying its worth "in current condition " what we are paying and the lenders are saying it meets lending criteria but it doesn't,
I am glad I have a good broker but even she is baffled as to what is going on

OP sorry to hog your post but as our situations are the same it might help us both to keep it as one thread, hope you don't mind

amnblog

Hi Cobweb

perhaps this is the valuers subtle way of telling you not to buy the property at all in it's current condition.

Why makes someones else's timber problem your timber problem.

Almo

We have the same issue with the Woolwich, they value the property at 197k but want a 100% retention over a failed damp proof course. Remedial work estimated at 5k.

We are going through their complaints procedure - not because of the retention per se, before anyone jumps on me, I get that they are quite within their rights to not offer us a mortgage at all, but because of errors in the reports produced (by e-surv) and the Woolwich's subsequent refusal to reconsider their position even with revised reports.

We have gone elsewhere for our mortgage and are expecting the formal offer to come in the post today, less than a week after application.

Gary123456790

Hi All,

We have just bought a house with damp issues. The whole house needs renovating and this was not unexpected.

Our valuer put 0 as value in current condition, then the agreed sale price for "price with essential works completed". In the notes he stated a damp and timber report was required.

We got the damp and timber report (which said failed damp proof course, work needed around £3,500) and they then sent this to the surveyor to revise his current condition price. I dont know what he revised it to but we got the mortgage.

I would offer to get a damp and timber report carried out - if the lender sees the cost as only a few k they may just keep this as a retainer.

In our situation the lender (Clydesdale) debated a retainer for a week and then just lent us the full amount.

Gary.

Almo

Sounds like it worked well for you Gary, are you in the house now? We had to get a specialist damp report, which is hardly worth the paper it's written on. It didn't make any difference to the Woolwich.