buying attached house

Catbert_HRD

I've been trying unsuccessfully to remortgage to buy the house next to ours. We have enough equity in our half of the house to do it, good income and intend just to take our time eventually bringing the two houses into one. The house next door is unmortgageable. Can anyone suggest a specialist mortgage provider as all the main lenders won't lend for this purpose?

ACG

Remortgage your existing property with any lender to buy a second home.

They wont ask you the address of the second property so you should be able to do this with any lender (subject to the normal criteria being met).

Catbert_HRD

I'll give that a go thanks

holly_hobby

This exercise is really not as simplistic as it may initially seem.

If your own primary residence will be mortgaged during the conversion (which of course it will), you have a major issue, in that your mortgage lender will have to agree to the works and "merger" of the 2 units (assuming of course planning permssion is obtained), and given that part way through the transition (and even post completion, given that the larger unit may not actually increase the market value by much or at all), the value of their security will be severly affected (ie during the process of removing the party wall) and until the 2 units are converted into 1 singular residential dwelling with 1 kitchen, 1 single main entrance/exit, 1 set of utilities etc), they will be rather nervous - and unless you have a super low LTV, may well decline the request.

Of course once the conversion is fully complete (assuming mge lender agrees to the works), you'll then need to have the 2 properties re-registered with land registry (with their extended boundries etc) under a separate and singular new title deed - all complicating the fact that you will effectively have 1 mge on only 1 half of the property !

So that means your existing mge will have to re-administered and reflect the brand new property spec's and title deed

Although, the easy way round that would be to remortgage the new single unit away for your current lender. The way to administer it (which your broker should be familiar with) would be simultaneous to the remortgage application, have your conveyencer arrange with land registry re the re-drawing (reflecting change to dwellings, property number, boudries etc), and registered of such under its new title number - meaning that when you complete, you are effectively doing so on 1 property and 1 title deed.

So, you can see that whilst obtaining the finance may be achieved, if the lender isn't aware/doesn't ask and find out that you're buying next door - as if so they will ask your plans for it (ie due to intend to convert or leaving in situ, and just have another family member living there), the actual mechanics of the exercise are much more complicated than you may think.

Usually this type of exercise is usually done where both properties are unencumbered, with the owner/developer then remortgaging post completion under the singular new title deed.

Of course, if you do obtain a remortgage without revealling your hand, you may see a solution in just not seeking the permission of or advising your mge lender re the conversion, and they being non the wiser, once you complete the build, just remortgaging away from them ...... but I obviously could not and would not recommended that.

You do need an experienced broker whom has some exposure to this type of enquiry, and understands the complications you may later face post completion (when they may well be out the picture !), and I think you will struggle if the full facts regarding the basis of the Equity Release exercise are revealled at outset.

You could also try Buildstore, whom specalise in renovation, conversion/self build fijnance - may help you bottom this out - http://www.buildstore.co.uk/finance/renovation.html

Anyhoo, wish you luck !!

Holly

Wigglybeezer_2

We are attempting to do this, with the added complication of being company directors who have dividends and retained profits in our company rather than salaries. We have a broker trying to sort to out but I am beginning to think it's a non starter. Very annoying as we have a big deposit and paid our previous mortgage off after 10 years despit being self employed.

GMS

What loan to value are you looking at? I am assuming you are raising funds from your current mortgage free residential?

There are lenders who will consider retained profits.

What has your broker come up with so far?

holly_hobby

If it helps and to avoid beating around the bush, Clydesdale* will look at your share of net profits & renumeration of Ltd Co controlling directors, as oppossed to just actual drawings (ie drawn salary & divs), that most other lenders use for assessment, supported by SA302s. (* NB- this is for information and general comment only, and does not constitute a recommendation or gte of your suitability).

If your broker hasn't approached them or are aware of their criteria, it may help ... but you will still have the build and resulting security itssues of the lender to contend with (if they become aware of your plans).

Hope this helps .. good luck

Holly xx