What type of loan do I need

etwallace

Am thinking of buying my old parents house, very large garden. I want to divide the land in half and build new house at the side, and then sell the original house and land. Will require a loan of about 200K to build the new house which I think can be paid off when the old house and land is sold. What kind of loan would I need and who to approach please, would it be a bank? Thanks.

bengalknights

A mortgage would probably be your best bet

PeacefulWaters

A mortgage lender.

But they might decline your plan to split the land.

etwallace

Should have said that parents old house and land will be purchased outright with cash.

[Deleted User]

In that case...a mortgage.

TadleyBaggie

It's still a mortgage, albeit for a new/self build.

etwallace

Thanks folks.

JimmyTheWig

Would it work better if the land was split in two before the parents sold it?

OP then buys the part with the house on with a mortgage and the part without the land for cash.
That would mean no pesky questions from the mortgage company about why he wants to raise funds against a house he already owns (do they do that, or is that just if you want additional borrowing?) and the mortgage company wouldn't need to be involved in the question of splitting the land.

robber2

why bother buying the house? Parents split the land, you buy the plot from them and build your house (potentially no mortgage required as you seem to have the cash available). Parents sell house on open market.

You both save on the costs of going through the house sale twice and you dont have to borrow.

Rob

bargainbetty

Have you checked the planning and building rules with the local authority/council? Splitting the land and having a piece without planning consent attached could cause a problem down the line.

Ensure you have the full consent/permissions in place first, and know exactly what you have to do to comply.

My friend is just about to pull out of a house purchase because the developer has not complied with the regulations and may well be left with a completely unsaleable house due to the council's reasonable refusal to issue retrospective consent/waivers.