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Indemnity Insurance won't cover structural defects - ideas?

Babooshki · 2013-09-20 10:59:54

Hi, in process of purchasing a house that has had numerous internal changes and an extension added at the back. None of these alterations/additions seem to have got planning permission so our solicitor requested an indemnity insurance policy from the sellers. Unfortunately, it states that one of the exclusions to the…

Comments

kingstreet Posts: 39,444 Forumite

21 September 2013 at 10:01AM

Babooshki wrote: »

Hi Kingstreet, so for instance if we asked for a reduction of £10k then the subsequent mortgage offer would be reduced in line with the new purchase price?

Yes. If you are borrowing the maximum loan to value for the lender or the product, you will find the maximum loan scaled back accordingly.

However, if you agree a price reduction, the lender may still decide to hold a retention until the essential repairs are done.

Therefore you may get a £10k price reduction and still have a £10k retention if that's the cost of the work. You'd need to increase your deposit by that amount to bridge the gap until the work is done, then the retention can be released.

I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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