Adding to mortgage for repairs to house

vintagegirl65

We had an offer on our house for the asking price, but due to a structural survey highlighting ground heave (categorised as subsidence) the buyers decided not to proceed. The house is old, grade 2 listed but the issue actually lies within a modern extension. Having instructed specialist building consultants, we have a complete report outlining the work that is required to remedy the situation (underpinning). The estimate for the work is £40-50k. Our mortgage is currently 1/3 of the market value, so plenty of equity. However, due to the sensitive nature of 'subsidence' we are nervous that if we apply to add to our mortgage or re-mortgage with a new lender to borrow extra funds to cover the repair costs, the lender will decline based on a valuation survey. Is this the best course to follow ~ ie, hope that the lender will loan additional funds knowing that the money is to be used to repair and restore the building or should we look at a homeowners loan for example as an alternative to borrow the money (although a far more expensive option). We are nervous of pursuing the mortgage option if the lender documents a decline of offer based on the subsidence(and possibly will blight any future offers on the house which require a mortgage). We want to repair the property in order to try and sell in the future, our insurance company have been informed but we do not wish to make a claim. Any advice very welcome!

[Deleted User]

Regardless of what happens now, any future buyers mortgage application will include the question 'has there ever been any history of subsidence'. As harsh as it seems, the damage is already done to the marketability and attractiveness of the property. Same with insurance, if you are planning to sell you will have to make sure your insurer is willing to transfer the policy to a new owner as unlikely a new insurer will come in and offer full cover with a question mark around ground movement

One of the conditions of a mortgage is that standard insurance is obtained so even though there are specialist insurers out there, if they have any conditions that wouldnt be classed as 'standard' the mortgage may be declined anyway. An example I have done recently was the mortgage going to full offer but the only insurance we could get had a £2000 excess for ground movement so lender pulled the offer

On your main question, doing a remortgage at less than 50% loan to value, its unlikely they will send a valuer out so mortgage should be fine. May collapse depending on the wording on the remortgage questions submitted through conveyancer about any disclosures that may affect the lenders security.

Further advancec from existing lender may be a better option as they wouldnt do a valuation and money should be released in a few days

Just to make clear: mortgage isnt a problem most of the time, I have a mortgage on my own house with historic subsidence. My point is that your value will have to reflect the fact that the property has movement. Otherwise you stick around for years to confirm it isnt ongoing.

Tom99

Why would pay £50k if you could make a valid insurance claim? As said above any damage to the marketability/mortgage-ability has already happened.