Right to buy mortgage with additional lending for home improvements

rainbow2014

Hi,

I wondered if anyone could offer me some advice. I recently applied to my local authority to purchase my council property, the price they offered the property for was significantly less than what they valued it at due to the discount for being a tenant for a number of years.

I was very happy with the discounted price so applied to a mortgage lender for a mortgage to buy the property and an additional £20,000 for home improvements because as the property stands it is unsuitable for our family therefore we need to build an extension. I first checked with the lender that additional lending is something they would consider and was told 'yes' however when their own valuation came back I was told that their valuation was £20,000 less than the councils valuation. I could have accepted this had I been able to buy an equivalent property in my area for their valued price, however there is just no way I could . So I am now faced with continuing with the mortgage but just at the purchase price so wouldn't have the cash to make the improvements needed, pull out of the purchase altogether and continue renting or try and find another lender and lose all the costs I've paid to date. I can easily afford the repayments on the amount of mortgage I am asking for so that is not an issue, the issue is that companies dont appear to be accepting the discount as equity in the property.

Does anyone know if any mortgage companies offer mortgages for the full purchase price of a council discounted property and additional lending for home improvements, Im needing LTV 80%.

Really hope that there is some hope out there!!!

steve4mandy

Not entirely answering your question, I wanted to borrow an extra £5K on my mortgage for a kitchen revamp, but on contacting the council, was told they do not allow extra borrowing in effect eating into their equity on the hose, they have a charge on the the house via your discount. This charge is written into my land registration for 5 years!

kingstreet

There are lenders who will allow you to borrow into the Council discount during the pre-emption period, but it must be for home improvements and the work you have done will be closely monitored by lender and Council.

The Council must provide written agreement to this.

The days of a fortnight in Tenerife and a new car "on the house" are well over.