help buying a house project

lewwidd

Hi,
I'm new here but didn't know where else to go after feeling i have exhausted all options.

My wife and I have found a house we are in love with. It's in the countryside, with a river in the back garden and is cheap cheap cheap. It's guide price is £46,000. It's going to auction which makes things a bit more difficult.

It has been in the process of renovation. Everything has been stripped out and as such it does not qualify for a mortgage (no working kitchen or bathroom).
We have roughly £4,000 in cash to use towards this.

We managed to find one place that will give us a renovation mortgage which will be roughly £80,000 to purchase the property and also to get it to the condition we want.
Sounds good so far?!?!
It takes 8-10 weeks to organise this, and as such it will have been sold by this point.

Is there ay alternative route that i can look into at least for some viable option?
We have looked into personal loans but have been told they do not allow them for the purchasing of property. Do we tell them we are buying a lavish £46k holiday?! *jokes* I heard thats what all these large £50k loans were for these days but after speaking to 4 large high street branches i have been told No, No, and NO!

Feeling disheartened and depressed after todays events of rejection.

Any tips help would be appreciated.

Thanks

lincroft1710

Guide prices are often wildly below the price achieved at auction. Having a river "running through the garden" suggests possibility of past and/or future flooding plus high insurance premiums

G_M

Sounds like you need to research how auctions work. 'Homes Under the Hammer' on TV makes it look easy!

* google 'property auction'. Lots of guides etc on the www
* GO to several (without any money) just for the experience
* Before you go to the one in question and bid, you need to spend money. Which may well be wasted if you are out-bid. Accept this fact. ie

- pay a solicitor before the auction to check the legal
- pay for a survey unless you know what you are doing construction-wise
- have your finance in place. Yes before the auction. Applying for a mortgage after bidding is too late. Better still, buy with cash.

* Get hold of the auction house's own guide to see what their specific rules are.
* remember 'guide prices' are just that. Guides. Often designed to get lots of people to attend, and then bid. Upwards.
* research that river. Can you insure? when was the last flood if ever? Not just of the house, but the area. What flood defences have been built since, if any?

Doing ANY of the above after the auction is too late. You'll either have commited yourself to whatever legal, structural, environmental etc disasters await you, or you'll have missed out on the property.

lewwidd

G_M wrote: »

Sounds like you need to research how auctions work. 'Homes Under the Hammer' on TV makes it look easy!

* google 'property auction'. Lots of guides etc on the www
* GO to several (without any money) just for the experience
* Before you go to the one in question and bid, you need to spend money. Which may well be wasted if you are out-bid. Accept this fact. ie

- pay a solicitor before the auction to check the legal
- pay for a survey unless you know what you are doing construction-wise
- have your finance in place. Yes before the auction. Applying for a mortgage after bidding is too late. Better still, buy with cash.

* Get hold of the auction house's own guide to see what their specific rules are.
* remember 'guide prices' are just that. Guides. Often designed to get lots of people to attend, and then bid. Upwards.
* research that river. Can you insure? when was the last flood if ever? Not just of the house, but the area. What flood defences have been built since, if any?

Doing ANY of the above after the auction is too late. You'll either have commited yourself to whatever legal, structural, environmental etc disasters await you, or you'll have missed out on the property.

I'm aware of how auctions work and I'm not going via what i have seen on tv.
I know getting a mortgage AFTER the auction is too late. In regards to the auction 10% of the price it sells for must be paid at that precise moment in time. you then have 28 days to make the rest of the payment (the remaining 90% of the purchase price)

I know that a GUIDE price is exactly that, however.. It failed to sell at the previous one, and the owners are accepting offers outside of the auction up to this Friday.

I'm aware of surveyors, solicitor fees etc.. and the structural work that needs done to the property.

As for the river. It is a large property with a large rear garden. At the bottom of the large rear garden is a big dip (technically we are on a hill as such) the river is situated there. Even in torrential rain and flooding days the house will not be subject to flooding which we have considered. There are no flood protection etc as i previously stated it is in the countryside. By this i mean there is no tescos for 30 miles, there is a services off a nearby motorway about 15 miles away, other than that its rural. Which i love.

The question i am asking is HOW i can get a hold of a lump sum of roughly £30-46k which can be paid back within 8-10 weeks when the application for a renovation mortgage has gone through successfully (no point applying until i can guarantee that first lot of money, as to not knock credit down by then not going ahead and requiring a different amount at a later date if missed out)

Many Thanks for your replies

davidmcn

There are bridging finance lenders around, ask a broker if you haven't already. But be prepared to pay a lot for the privilege. Also refinancing may then be more tricky even if the house is in good shape, as lenders generally don't like lending to anyone who has owned for less than six months.

lewwidd

davidmcn wrote: »

There are bridging finance lenders around, ask a broker if you haven't already. But be prepared to pay a lot for the privilege. Also refinancing may then be more tricky even if the house is in good shape, as lenders generally don't like lending to anyone who has owned for less than six months.

A bridging loan would be ideal, although they require you to have more than 10% more like 30-50% which we don't have a would struggle to accumulate by friday paying a lot for the privilege wouldn't be a problem as i said in 8-10 weeks it would be repaid in full. I have heard that bridging loans can appear a bit like a pay day loan though and can adversely effect your credit after getting one and have heard horror stories of people being unable to acquire a mortgage after taking one out and such losing the house and money paid because of it - eek!
I don't think it would be classed as refinancing would it?! technically be a small auction loan and then taking on a self build/renovation mortgage which would be released slowly upon completion of certain requirements.. bit of a difficult one really.

gettingtheresometime

Well you could speak to the owners & see if they will pull out if the auction to give you time to sort the financials out....or try the euro lottery tomorrow.

ACG

You have found a company who will lend you 200% of the property value? Paid upfront or in stages?

Forget guide prices, if that is what it is worth great. But if you think once renovation work is complete it will be worth £200k then realistically it will probably sell for closer to £100k to a cash buyer.

You would need bridging finance, but I am not sure your savings are anywhere near enough, mostly because you will have fees to pay but also I assume the guide price is way off what it will actually sell for.

Doozergirl

You need to be really careful. It isn't just the lack of kitchen than makes a house unmortgageable. Back in the day we were strung along for a year and had to finish the entire renovation and fund the whole house in cash before they'd release a penny!

Begging the surveyor to finally release the funds a week before our wedding day (which also had to be paid for!) was more than a bit stressful!

davidmcn

lewwidd wrote: »

I don't think it would be classed as refinancing would it?! technically be a small auction loan and then taking on a self build/renovation mortgage

Taking out one loan to repay another one is the very definition of refinancing. But no matter what you call it, lenders don't like borrowers who have been owners for less than six months. There will be some available but you may be restricting the pool of possible lenders too much given all the other circumstances.

eddddy

If you google 'auction finance' you will find quite a few lenders.

But I'm not sure that any will take you seriously, because you have no track record in property development.

(They would be worried that you might buy a £46k property, botch the renovation work making it even worse, run out of money and leave them with a property that can only achieve £30k at auction.)