Repossession finance - cash purchase, mortgage for renovation

Jigglebiz

We are offering on a repossessed property and aim to purchase fully in cash. The offer we have made is £225k and is currently the highest offer but we know we can be outbid at any time up to exchange. We would not be able to go any higher in cash.

We are selling a property to a chain free buyer and own that property without a mortgage, which will release the cash for this purchase.

We estimate the repossessed property needs at least £40k spending on it. I have got an AIP from London and County to cover well in excess of this amount.

Both the purchase and remortgage deals are very similar in interest rate, with no valuation or application fee. The broker advised that the lender NatWest is taking about a month to process applications at the moment.

Is there any way we can apply for a purchase mortgage while actually completing the purchase in cash (giving us the advantage over other buyers)?

Obviously if we did it as a remortgage, we’d have to wait until we had the keys before applying, leading to delays in getting finance in place for the work.

Any ideas?

Jigglebiz

Anyone got any thoughts?

Farmerbob

My initial thoughts are this is a bad idea, I can’t speak for all but some lenders won’t let you remortgage having only just bought the property cash or otherwise until some time has passed i.e 6mths at least. You won’t get any purchase products if you already own it either

Jigglebiz

Thanks - I guess applying for a purchase mortgage first is more sensible then.