100% Mortgage Retention

suziemoon

Hi, This is my first post so I hope it works OK.

I'm in a right state. I received a letter from Abbey saying they are delighted to offer me a mortgage, Part A and Part B, were fine, when I got to Part C it said that the recommendations of the Valuer are applicable, I read the Valuation Report and the Valuer recommends that a full retention is made until renovations are made to Abbey's satisfaction. There are no structural problems or problems what so ever with the property, the retention is because the property is a Barn Conversion, when first converted 15 years ago it was converted into an Office, so is basically 3 30 meter rooms with a kitchen area and 2 toilets with a shower. All the property needs to make it livable is some plasterboard partitions to mark the bedrooms. I don't understand why a full retention is being made when the partitions will cost 10K max.
Has anyone else had similar problems?

ACG

Its because they want to ensure the work does get done.

By doing this, it means you will do the work. You may have done it anyway but they would have had to take your word for it.

suziemoon

I can't buy the property without the Mortgage and can't undertake the alterations until I own the property.

Is there any chance the Valuer will suggest a retention of the cost of the work rather than the whole amount?

Would getting my own Valuation done have any point?

Yorkie1

Does it already have residential planning permission, or will that need to be sought too?

Thrugelmir

Is the property currently an office?

ACG

You can get a bridging loan, this will allow you to complete do the work and then drawdown on the mortgage.

Bridging loans are not particularly cheap however.

It might be worth speaking to a broker.

amnblog

You have applied for a residential mortgage for a property that it not configured as one.

As ACG says.

You need a bridging loan and to consult a broker.

suziemoon

Hi Thanks for all your advice, yes the property has residential permission but the changes have not been done yet. We want to move in and do the changes at our leisure when we know what we want. The barn has a kitchen area and toilet and shower room anyway so it is perfectly habitable.

ACG

Try to look at this from a lenders perspective...

They have a residential mortgage on a property which is not geared up to be a residential property as it stands. If they had to repossess it would be more difficult to sell than if it were.

This should have been discussed before ever submitting an application really, but you are where you are. Your option is to find a new lender or rush through to get it in a residential state and then complete the rest at your leisure.

suziemoon

Thanks ACG, I hadn't thought of it from that angle.

What do you think would be our best bet?

Try a different lender or to get a bridging loan?

The property is nothing like an office in reality, the conversion was done with the intention of being made into a residential property in the future for one of the Owners, his life has changed and he can no longer it as his home.

If we were to try a different Lender is it likely that the same Valuer would look at the property again?

ACG

Its a possibility that it could be the same person. You need to discuss these things with the lender.

I cant say which i think is the best as its a regulated industry and we dont have the info needed to make that call.

Your options really are:
- Bridging loan (around 1% per mont interest rate) to enable you to get the property acceptable by your lender or;
- find a new lender who will accept it as is.

If your convinced its going to take beyond where the mortgage offer expires to do the work then i think you need to find a new lender rather than a bridge, but you may find you have the same problems , which is why you need to speak to the lenders beforehand.