Question re "unsuitable security"

waterhouse

I have applied for mortgage from Nationwide through a broker.

Our application was agreed:

application is agreed subject to valuation

Nationwide performed the survey/valuation, and came back with the following:

Nationwide have come back and have stated the property is unsuitable security due to commercial use of part of the building. There is a gym with antisocial hours which will affect future saleability.

Should I be worried that another provider may also reject us on the same grounds?

The property is in a desirable location, its on the first floor but not directly above the gym, the property is on the other side of the building, above other commercial units which are currently being used as offices.

The gym is open from 5AM - 12PM.

Any advice? Is this quiet common?

Any help advice would be great.

lincroft1710

Go to a "whole of market" mortgage broker

waterhouse

lincroft1710 wrote: »

Go to a "whole of market" mortgage broker

We are already using one. I just wanted to try and gauge if this would be an issue with a lot of providers or if it was just specific to NW.

stator

That's the sort of question a decent mortgage broker could answer

davidmcn

It is commonplace for lenders to be averse to properties which are in the same building (or next door) to commercial properties, particularly those uses which might be deemed more "antisocial". Probably not unmortgageable, but you're restricting your options.

G_M

You willprobably find a lender who accepts the property as suitable security. But you will have less choice of lender and may end up with a more expensive product (eg higher interest rate and/or lass incentives like free legals etc).


If/when you want to sell, your buyers will have the same issue, so you may lose some potential buyers who get put off when their 1st mortgage application, like yours, is refused. This in turn could reduce the value of the property when you sell.


Having said that, if the property is right for you, and you believe the price is fair (bearing in mind the above!), and you go in with your eyes open, then.... find yourself a lender and go ahead.

jonnygee2

Should I be worried that another provider may also reject us on the same grounds?

Yes and no. When I bought my property some mortgage providers turned it down because it was deck access. Also, my partner is on a limited term visa which further shrank the pool of potential lenders.

Still, I managed to get an offer from a high street bank at a very slightly higher (0.1%) rate than the best offer.

My mortgage broker was of great help in finding the banks most likely to lend. If yours isn't being helpful find a better one.

waterhouse

G_M wrote: »

You willprobably find a lender who accepts the property as suitable security. But you will have less choice of lender and may end up with a more expensive product (eg higher interest rate and/or lass incentives like free legals etc).

If/when you want to sell, your buyers will have the same issue, so you may lose some potential buyers who get put off when their 1st mortgage application, like yours, is refused. This in turn could reduce the value of the property when you sell.

Having said that, if the property is right for you, and you believe the price is fair (bearing in mind the above!), and you go in with your eyes open, then.... find yourself a lender and go ahead

The property has over 10 apartments on the first floor. With 4 above the gym. A few have sold over the past few years based on what I have found on the land registry website. So I think we should be able to find a lender.

With regards to selling, I think your right it may be difficult, but also rules are always changing as well as peoples taste.

We would want to live in the property for 10+ years, as stated before, the location is ideal 5 min walk from the town centre, 10 mins walk from 2 train stations. The space for the price is also good, when compared to other buildings within the area. The block is less than 10 years old. It meets all of our criteria in terms of location and property.

Now its just down to finding the right lender, with the right product for our specific circumstance.

waterhouse

jonnygee2 wrote: »

Yes and no. When I bought my property some mortgage providers turned it down because it was deck access. Also, my partner is on a limited term visa which further shrank the pool of potential lenders.

Still, I managed to get an offer from a high street bank at a very slightly higher (0.1%) rate than the best offer.

My mortgage broker was of great help in finding the banks most likely to lend. If yours isn't being helpful find a better one.

So we are using an online broker, they have been very helpful so far. Unfortunately for us we got the news about this yesterday and now they are closed until the 2nd of jan because of the holidays.

jonnygee2

So we are using an online broker, they have been very helpful so far.

It's not Trussle.com is it? I started using them first, they told me my property was unmorgatgeable! Useless!

waterhouse

jonnygee2 wrote: »

It's not Trussle.com is it? I started using them first, they told me my property was unmorgatgeable! Useless!

No we have been using Habito, they have been pretty great so far.