Demolish an existing mortgaged house to split and rebuild

anty50

Hi All

I live in a bungalow for which I have planning permission todemolish and build 2 new detached properties. I will live in one of them. Theissue is I currently have a mortgage on this property. I have funds to buildthe two new builds, but I don’t have enough money to pay off the mortgage and fundthe builds.

It’s been suggested to me that I could keep ‘quiet’ aboutthe demolition and subsequent builds with regards to my existing lender. Then when the builds are complete I can remortgagewith a new lender.

Remortgaging one of the new properties will be enough to payoff the mortgage so I won’t need to re-mortgage both plots at the same time.

But as the existing property is to be split I am not surehow I could register the new plots with land registry and then remortgage oneor both of them with having an existing mortgage – can splitting andremortgaging be done simultaneously, i.e. so that is seamless to the existinglender? Is this too risky?

Any advice would be appreciated!

Thanks

Anty50

Foxy-Stoat_3

Speak to your lender and get their approval before devaluing their property.

If you have plans drawn up with permissions etc, builder on board, and enough funds to do the building, including your accommodation, new services connections quotes and a good contingency fund then they should be fairly approachable.

stator

I certainly would not ever consider doing it without the lender's knowledge and consent.

It sounds like you simply don't have the money to do what you want to do. Do you have the money to pay off the mortgage without the building costs? You might be able to find a builder who will come in with you on the project.

AdrianC

Pay off the mortgage, then get a mortgage for the building costs from a lender who knows what you're doing?

Your lender will throw a pink fit if you demolish the house that they believe is security for the money you've borrowed from them - and quite right too...

Land_Registry

It is not unusual for this to be done but you are likely to find that the lender will not remortgage part of the current single title and will insist that you split it first.

You can apply to split a title by lodging a form AP1 to update the register and paying a £40 fee. The split is based on a plan which you will need to prepare and supply which defines the split. Guidance on how to prepare a suitable plan for registration purposes is available here
As others have posted your current lender will need to be aware etc

Whilst we reserve the right not to split the title if there is a genuine need to do so as in this case and it relates to a single registered title then the odds are we would.