90% mortgage on a flat - help!

LadySaver

Hello!

Any help and advice would be much appreciated on an issue that's cropped up today with our mortgage broker.

After years of saving, my husband and I believed ourselves to be in a position to buy a flat. I've done affordability checks and we'd spoken to a broker (a family friend of my husband's) before starting our flat hunt and had chose something that should be well within what was quoted as our maximum budget. We've found the perfect place and had an offer accepted, but today our broker dropped something of a bombshell.

Despite our excellent credit scores, clear and proven ability to comfortably afford mortgage payments he has told us that actually we may struggle to get a mortgage because lenders do not offer 90% mortgages on flats. The lowest they apparently go to is 85%, which in London terms means we have no hope of saving that any time soon.

This was crushing, and the first time it's been mentioned. I've scoured the internet and found nothing to suggest this anywhere, has anyone else heard of this?! We don't really want to move out of London as this is where we work, our lives are etc and we thought we'd finally got there!

ToriP

It is harder to get a mortgage on a flat. According to our broker

Annisele

Is the flat a new build? Or above/near a takeaway? Those might be as much (or more) of an issue as the fact it's a flat.

I believe there are some lenders that will in theory lend at 90% LTV on flats, but they might not like something about the rest of the application.

LadySaver

Thanks for your replies! It's a purpose built freehold flat, 1960s block in a quiet residential area - we had purposefully avoided anything that we knew lenders would be hesitant about after doing our research (i.e. avoiding flats above shops).

Senior_Paper_Monitor

Freehold !!! Are you sure ?

Suggest you post property details.

minimike2

Many mortgage lenders do not like freehold flats.

Many mortgage lenders do not lend up to 90% on flats.



I know one lender that will consider this scenario, as long as there is a maintenance contract in place. There may be more. If your broker was half decent they could find a lender to consider your application without much hassle and I am suprised they have come back and said they can't place it.

I'm not saying its an easy case, far from it, but there is definitely a high street lender that will consider it.

LadySaver

Sorry, you're right on the freehold - my typo! It's a share of freehold.

Thanks for the note of optimism though, I'm going to get a second opinion from another broker tomorrow, good to know that it isn't a totally hopeless cause! There is a management arrangement in place - assuming getting details of this from the agent may help the case?

kingstreet

The flat will be leasehold.

That you are purchasing a share of the freehold does not in any way affect the lease on the flat. You should establish how long is left on it to ensure it meets lender requirements.

Share of the freehold does not entitle you to a lease extention when you feel like it. You will need to jump through the hoops set by the other joint freeholders of the building.