Staircasing to 100% - some advice needed

gazfocus

We too are looking to do exactly what you are doing.

I bought a 50% share in our house in July 2012, I am in a 2yr fixed term mortgage so we're waiting til that ends to staircase but in that time we will have had new carpets throughout, new kitchen, Conservatory, new fence and garden leveling off, so we're too banking on the housing association dismissing any improvements we've made.

In terms of value though, we're hoping that the Housing Association will value the house at what we bought it for and then we want to have 20% of that value to put down as a deposit and will apply for the new mortgage in both our names.

carnut1234

jacobtheamish wrote: »

LTV is the amount of the loan versus the value of the property. When you look to purchase 100% of the house, you will in affect be requiring a remortgage. On the application you will provide value and loan amount required. The loan amount required will be based on what the HA want for their 'share' plus the mortgage you already have.

Any mortgage app will be subject to survey, the surveyor will down value if you state the value higher than its true figure.

ok i understand this... im getting somewhere

obviously the values i have used are educated guesses as i wont really know untill i start the process but just to help me understand further lets just pretend that the HA come to value the house. they say that the house at its current state is worth £180,000 but this is due to the improvements ive made and that if i hadnt made these improvements it would only be worth £156,000 so they will sell their share based on the £156,000 so that the equity that has been made because of my improvements is mine to keep.

wouldnt the mortgage lender be ok with this? surely this then protects people like myself who do invest in the property as they know that they will eventually buy the whole property.

carnut1234

gazfocus wrote: »

We too are looking to do exactly what you are doing.

I bought a 50% share in our house in July 2012, I am in a 2yr fixed term mortgage so we're waiting til that ends to staircase but in that time we will have had new carpets throughout, new kitchen, Conservatory, new fence and garden leveling off, so we're too banking on the housing association dismissing any improvements we've made.

In terms of value though, we're hoping that the Housing Association will value the house at what we bought it for and then we want to have 20% of that value to put down as a deposit and will apply for the new mortgage in both our names.

you explain it so much better than i do. this is exactly what i mean. we want to use the equity that we have made due to the improvements to help use remortgage to buy the full house.

kingstreet

If you write the purchase price on the mortgage application, £156,000 and the lender's surveyor comes out to value it at £156,000 how do you think the lender is going to take any other figure into account?

This is why I keep asking. Is the lender going to take the lower of purchase price, or valuation as it usually does, or have you established it is going to take this higher value you think it's worth?

This is a genuine question.

jacobtheamish

kingstreet wrote: »

If you write the purchase price on the mortgage application, £156,000 and the lender's surveyor comes out to value it at £156,000 how do you think the lender is going to take any other figure into account?

This is why I keep asking. Is the lender going to take the lower of purchase price, or valuation as it usually does, or have you established it is going to take this higher value you think it's worth?

This is a genuine question.

Are there not going to be two vals required?
One for the Housing association to establish how much they want for their share and then the mortgage val conducted on behalf of the new lender?
I thought the new lender will require their own val to assess the value of the security, irrelevant of the HA's val

carnut1234

kingstreet wrote: »

If you write the purchase price on the mortgage application, £156,000 and the lender's surveyor comes out to value it at £156,000 how do you think the lender is going to take any other figure into account?

This is why I keep asking. Is the lender going to take the lower of purchase price, or valuation as it usually does, or have you established it is going to take this higher value you think it's worth?

This is a genuine question.

well i would put the purchase price of £156,000 but when the survayer goes to do a valuation im sure they would value the house at £180,000.

Im sorry if im not giving you the right answer.

kingstreet

It's not about the answer you give me. It's about establishing how your lender is going to view this.

I'm asking if you have, or intend to, speak to them about it. I'll just keep out of this thread in future.

kingstreet

jacobtheamish wrote: »

Are there not going to be two vals required?
One for the Housing association to establish how much they want for their share and then the mortgage val conducted on behalf of the new lender?
I thought the new lender will require their own val to assess the value of the security, irrelevant of the HA's val

When the OP fills in the mortgage application, he's going to complete the "purchase price" box because this is a purchase of equity as well as an internal remortgage, in Barclays parlance.

In mortgage terms, it's going to be the lender's surveyor's valuation which matters and that is not going to be more than the purchase price, is it?

I genuinely do not know the answer to this and I'm hoping the OP is going to ask his lender, for his benefit.

Like I said, enough's enough. I've made my point and I'm going to bow out.

carnut1234

kingstreet wrote: »

It's not about the answer you give me. It's about establishing how your lender is going to view this.

I'm asking if you have, or intend to, speak to them about it. I'll just keep out of this thread in future.

ive not spoke to a lender yet, as mentioned on my first post im trying to gather as much information as possible for when i do speak to a lender.

please continue to post as your being very helpful, the issue is an expert like yourself trying to talk to a complete noob like me... we will get there in the end.

thank you for your comments.

Kynthia

kingstreet wrote: »

If you write the purchase price on the mortgage application, £156,000 and the lender's surveyor comes out to value it at £156,000 how do you think the lender is going to take any other figure into account?
.

I think the key point here is that it's probably not then lender's surveyor that will come out to value it at £156k but the housing association's surveyor.

I don't know if it's the same with all SO properties and with staircasing, but my experience of selling a SO property is this. Before going on the market, at the request of the HA the owner gets a surveyor to value the property and this is used by the HA to calculate the selling price and their share once a sale goes through (even if the seller goes outside the scheme and sells 100% for less than the valuation amount). The property then goes on the market. A buyer then makes an offer and then their own mortgage company gets a surveyor to do a valuation as they would when lending to anyone purchasing any type of property. Therefore I would expect the OP's mortgage lender to request their own valuation for lending purposes which would be based on the actual current value, and would take place at a later date and completely separately from the HA requested valuation for staircasing purposes. However the OP should definitely check this would happen if it is key to their plans.