Mortgages & Lease extensions

lewishardwick

Hi all,

I have found a property I really like, however the lease is now at 76 years. I think I could get a bit off the asking price, but the EA is muttering 'price reflects lease'. Fair enough, that's for me to discuss with them.

I've been reading up on lease extensions and many articles mention adding the extension costs to the mortgage.

I'm just wondering, has anyone ever doe this? I wouldn't have much equity in the property by the time the two year block on issuing a S42a lapses. I guess the lender would want me to have more equity in the property...

I'm looking at using a 95% HTB Mortgage Guarantee so would initially have just 5% equity.

quotememiserable

It sounds quite possible, because you'd increase the value by extending the lease, or buying the freehold. Why not ask your lender?

Daniel_Sparkes

It's a tricky situation, they'll be few if any lenders that would allow for the costs of the lease extension to be added to the mortgage itself. The logic says they would but in reality they'll not be comfortable with this.

You do have the option though of finding a lender which allows for the length of current lease, then in time you can extend the lease, say in a few years time when you're in a position to do so.

Hope this helps, but any questions just let me know.