Mortgage

JessHS

What's this?

JESSHSView public profileSend private messageFind more postsView all thanked postsAdd to contacts

Hi

I am looking for advice from anyone that has been in my situation before.

I am in the middle of buying a shared ownership property, mortgage adviser went to apply for my mortgage and told me there was a problem with the leasehold and that it needs extending before I can apply for my mortgage as it needs at least 85 years on it.!

I am not sure what I do next or who to contact? I have contacted the estate agent.!

And I'm not sure who will pay for the lease extension or if it has to be done? Should it be an option for me to look at another lender or will every lender want at least 85 on the lease.!

I am a first time buyer and feel like I dont have a clue

Any comments with people that have been in this situation before would be much appreciated

Bossypants

Tell your solicitor and/or the EA to inform the seller of the situation. Who pays for the extension will be a matter for negotiation between you, but be aware that extending a lease can be a long and painful process. When I was buying a flat in similar circumstances, both seller and freeholder were aware before the sale and all were agreed that the fee would be covered by the seller, but the whole thing still took a full 9 months from offer accepted to exchange and completion.

In your position, unless this flat is truly exceptional and you are prepared to wait, I would honestly start looking at other places.

JessHS

Omg 9 months! Thank you for your advice!

AdrianC

The thing you should be worried about here isn't that no lender will ignore the short lease, but the fact that the lease IS so short...

If you buy the property with a short lease, then it's 100% your responsibility to pay to extend it.

kingstreet

Typically on a SO resale the HA will extend the lease for you FOC.

You will need to inform the vendor, via their agent that you are unable to proceed as things stand.

A combination of SO and a short lease may not be easy to overcome, which is why HAs can be helpful on this.

JessHS

The seller is saying they dont want to pay for the lease extension (because it is too much) and saying can I go with another lender, however looking for another lender with fewer years on the lease could cost me more, has anyone been in this position before?
The HA have said they wont pay anything towards the lease extension.

Bexgrossman

JessHS wrote: »

The seller is saying they dont want to pay for the lease extension (because it is too much) and saying can I go with another lender, however looking for another lender with fewer years on the lease could cost me more, has anyone been in this position before?
The HA have said they wont pay anything towards the lease extension.

Seller knew 100% the flat has a short lease and they are expensive to extend. Walk away unless the flat had this price reflected. The seller appears to be looking for a cash buyer.

kingstreet

JessHS wrote: »

The HA have said they wont pay anything towards the lease extension.

That is surprising. They have the opportunity to meet their 'raison d'etre' which is to free up affordable housing for those who need it by helping out of affordable housing those whose need has ended.

Have a chat to your local councillor and think about contacting your MP's office. Their staff can still handle constituency issues before the election.

hazyjo

Please make sure you are fully aware of what having a short lease means for you.


How many years are actually left? It may be unmortgageable. It will cost thousands to extend - not something you can ignore.


It will be worth significantly less than other similar properties.

JessHS

The lease has 84 years on it at the minute and needs 85 with the lender I am going with. The seller says it is going to cost thousands as the minimum they can extend it to is another 99 years on top of 84. And they are not willing to extend, which I understand. But I'm not willing to get a different mortgage that will cost me more as I dont have anything to sell because I am a first time buyer. I asked karbon homes if they pay anything to extend the lease and they said no unfortunatly. So might just have to let it go.

getmore4less

JessHS wrote: »

The seller is saying they dont want to pay for the lease extension (because it is too much) and saying can I go with another lender, however looking for another lender with fewer years on the lease could cost me more, has anyone been in this position before?
The HA have said they wont pay anything towards the lease extension.

The price needs to reflect more than the cost of extension against other places to make taking on the risks that come with shot lease.