Mortgage refusal because property not in mortgagable state - will it go against us??

willeeckers

Hello, my first ever post so please be kind

Hubby and I are looking to purchase a property which is something of a renovation project. We have the ability to purchase for cash thanks to a loan (returnable within 2yr) from my parents however if it is possible would like to take a small mortgage, 35k, as the full purchase price in cash would be a stretch for parents.

We have been informed that previous attempts to purchase have failed due to property not being in a mortgageable condition, the main reasons the estate agents have cited is the flat roof, the derelict condition of an out building attached to house and the proximity of the road.

Our main concerns our....

If we try to obtain a mortgage and are refused on similar reasons will it go against us on a credit history

And....

Ultimately we will need a mortgage to pay back parents loan, how can we go about finding out what work would make it mortgageable without out damaging credit history?

Thanks in advance for your help

Thrugelmir

willeeckers wrote: »

If we try to obtain a mortgage and are refused on similar reasons will it go against us on a credit history

No it won't.

We have been informed that previous attempts to purchase have failed due to property not being in a mortgageable condition,

I would suggest employing your own surveyor before even considering making an offer.

willeeckers

Thanks, hubbie is an architect /project manager by trade so does have far more of an idea of exactly what he is looking at from a building condition etc.

We were more wondering what makes a property un mortgagable and would that vary from lender to lender. If the problems are as listed above we can fix two of them but nothing you can do with regards to the proximity to the road??!

Thrugelmir

With regards to a mortgage the property has to be in habitable condition.

The other issue is that a lender may place a sizable retention on the property until certain works are done. This may be the stumbling block for many people as they don't have the available funds to cover the retention along with getting the prescribed works completed.

Dave_Ham

You need specific mortgage advice now, before you spend any money in this project

There are a few variables which my gut says stay away, but briefly if you cannot achieve finance now, selling in the future will be an issue

If even the Estate Agent is giving you a health warning on the purchase, then take formal advice before incurring a penny in cost

Best of luck

davidmcn

willeeckers wrote: »

If the problems are as listed above we can fix two of them but nothing you can do with regards to the proximity to the road??!

Never heard of "proximity of a road" being something which deems a property unmortgageable. How proximate and what sort of road are we talking about?

I presume it's the condition of the flat roof which is the issue rather than the mere fact that it has a flat roof?

willeeckers

Thanks for all your replies. To give a bit more detail to the property it is currently in habitable condition, has kitchen, bathroom etc. The original property is of timber frame construction circa late 18th century it then has a number of later additions to it including the section with a flat roof which has indeed failed. It is not a large area of flat roof and would probably cost in the region of £1500 to £2000 to repair, money which we have. The other problem is a small outbuilding which has been added on to the gable end of the original cottage, the end of the outbuilding has collapsed.

With regards to the proximity to the road the cottage is built at a right angle to the road with the roadside gable being more or less on the roadside. The road itself is a single carriageway A road but in a 40 mph zone.

We originally viewed the property back in September 2014 guided at 180k ( detached with large garden on Herefordshire/Worcestershire boarders) and due to condition and the amount of work we felt required we offered 135k. Initially this was refused however in December the vendor decided he would be willing to accept, we have said sale is subject to us further investigate build costs and mortgage etc.

We plan to either just repair the existing or if funds allow subject to planning (which the local planning officer has suggested would be looked apon positively) pull down the later additions and build a new extension. Costs for which we are still waiting on from a couple of friendly QS's my OH knows.

We have spoken to one FA who wasn't all that much use and just seemed intent on selling us insurance :-/ Hubby has an appointment to go see his current mortgage company (barcalys/Woolwich) and hence we were wondering if agreeded to £0 arrangement fee mortgage and had valuer out to see what response we got if it would go against our credit rating if mortgage is refused due to condition of property.

We really aren't sure which way to go, keep talking ourselves both into and out of doing it, it is both a massive risk but potentially gets us what we want an awful lot sooner. A house similar to what we envisage this property finished as sold in Oct 2014 for 240k.