Advice needed - Feedback from Mortgage Valuation

Bennettxoxo

Hi all,

FTB here.

We have applied for a mortgage though Barclays for a 3 bed semi through a broker. We are looking to borrow £126,000 from the bank and a surveyor has now completed the valuation on the property.

Barclays have comeback to our broker and said:

"Received survey report and unfortunately the property does not comply with the lending guidelines. The surveyors comments are as follows.

- Requires a complete refurbishment, requires complete re-wire. Also the survey report states.

- Obtain a qualified electricians report and estimate.

- Obtain a specialist timer and damp contractors report on the internal floors.

- Obtain a speicial timber and damp proofing report and estimate hazardous to health and disturbance or removal of this material requires speicial precautions. Advice should be obtained from a licensed speicialist contractor before undertaking such work.

Based on the survey report, we are unable to lend on this property."


This valuation hasn't brought back anything we didn't already know about. We knew the house needed a full re-wire and we knew the damp would need looking at. The hazardous material they refer to is the asbestos roof on the garage which isn't damaged. We have the money for these things which we intended to do prior to moving in and stated this in our mortgage application.

Our broker has gone back to the bank to ask about retention of the mortgage with a view to these works being carried out but they have said without reports mentioned above they will not discuss this.

I have started looking for companies to complete these reports.

Really, I was just wondering if anyone knew what the lending guidelines are for Barclays or if anyone has had this issue before and what the outcome was for them? What is the likelyhood that they will still decline lending after these reports are done? Are they just trying to cover their backs but would lend after knowing the work estimates?

Any advice or input is greatly appreciated as I am a very nervous FTB and need a bit of reassurance.

sal_III

It seems like Barclays has lower appetite for risk than you. If you knew about all these problems how did you made an offer without having reports of the full extend and cost of the remediation work required?

I suspect that even with the reports Barclays are likely to refuse the mortgage, as there is no guarantee you will end up carrying the work, leaving them with poor security.

It's their (well their customers) money - their rules.

Bennettxoxo

sal_III wrote: »

It seems like Barclays has lower appetite for risk than you. If you knew about all these problems how did you made an offer without having reports of the full extend and cost of the remediation work required?

I suspect that even with the reports Barclays are likely to refuse the mortgage, as there is no guarantee you will end up carrying the work, leaving them with poor security.

It's their (well their customers) money - their rules.

The work would have to be completed in order for us to move in really. We can't really live with damp on the living room wall and electrics from the 1970's. In terms of the rest of the house, it has a functioning bathroom and kitchen and the central heating was replaced around 10 years ago.
The reports are more so we can assertain the actual costings for the work but we have money saved in order to do what is needed. We made sure to factor the work needed into the offer we made on the property.

sal_III

So you don't know how much it will cost, but you have enough money set aside... Pardon my skepticism, but I somewhat doubt as a FTB you have a better ability to value the property under this circumstances than the professional surveyor/valuer the bank sent.

You took a risk making an offer, accepting the risk that the professional costing for the work required might be higher than what you estimated.

The Lender refuses to take the same risk, plain and simple.

muhandis

What does your broker advise you to do? There might well be other lenders (possibly non-mainstream ones) who *might* be more willing to lend on said property? How much is the LTV you're looking at?

Bennettxoxo wrote: »

Any advice or input is greatly appreciated as I am a very nervous FTB and need a bit of reassurance.

[Deleted User]

Bennettxoxo wrote: »

The work would have to be completed in order for us to move in really. We can't really live with damp on the living room wall and electrics from the 1970's.

That's the key bit - especially the bold. If it's that bad then that's why they're not even prepared to consider lending on "current value" (pre-works)

I'd think either bridging loan or a specialist lender to re-mortgage away when the work is done.

Getting a bridging loan as a FTB could be difficult, so likely the latter.

Only you know the area - but would the work really increase the value as much as you're hoping? Is it worth all the effort + higher (initial) rate at a specialist lender?

I'm a FTB so completely understand (I looked at the same type of houses before I started my job) but sadly a lot of these very poor properties seem to be FTBs trying to get a "cheap" property and they do intend to improve them - it's just not suitable for a standard mortgage.