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Confusing mortgage situation
EKArcher
Posts: 6 Forumite
Hi Martin,
We desperately need your help, please be patient while I explain as this is a little complicated.
In 2014 I purchased a 2 bed ground floor converted flat.
In 2016 the 1st floor flat came on the market and my father purchased it to let out.
The man the rented it is now my husband and we live in the 2 flats as though its a house. My father agreed to this on the condition that everything was put back in place should we decide to sell. We have had the council tax changed to reflect this.
Last year my husband and I were in a position to buy the flat off my father and convert the 2 flats back to a house. We had a mortgage in place and were due to complete just at the beginning of lockdown but the mortgage provider pulled out (apparently it was nothing to do with covid 19 but my broker could confirm exactly why).
We have just been in touch with my current mortgage provider to see if they can be of any help to us, as my husband is self employed they are basing his earnings on 4 x the employment grant he received during lockdown which is obviously far less than his actual earnings. This has given us a huge difference in what we can now afford and what we need to purchase the 1st floor flat.
It was also mentioned that we might not get the full amount as they can only lend on 80% of the current valuation, well as the house currently doesn't exist then thats 80% of the ground floor flat which obviously wont be enough to purchase both flats.
Im super confused and cant work out if there is a way around this situatuon.
Can you advise please?
Many thanks
We desperately need your help, please be patient while I explain as this is a little complicated.
In 2014 I purchased a 2 bed ground floor converted flat.
In 2016 the 1st floor flat came on the market and my father purchased it to let out.
The man the rented it is now my husband and we live in the 2 flats as though its a house. My father agreed to this on the condition that everything was put back in place should we decide to sell. We have had the council tax changed to reflect this.
Last year my husband and I were in a position to buy the flat off my father and convert the 2 flats back to a house. We had a mortgage in place and were due to complete just at the beginning of lockdown but the mortgage provider pulled out (apparently it was nothing to do with covid 19 but my broker could confirm exactly why).
We have just been in touch with my current mortgage provider to see if they can be of any help to us, as my husband is self employed they are basing his earnings on 4 x the employment grant he received during lockdown which is obviously far less than his actual earnings. This has given us a huge difference in what we can now afford and what we need to purchase the 1st floor flat.
It was also mentioned that we might not get the full amount as they can only lend on 80% of the current valuation, well as the house currently doesn't exist then thats 80% of the ground floor flat which obviously wont be enough to purchase both flats.
Im super confused and cant work out if there is a way around this situatuon.
Can you advise please?
Many thanks
0
Comments
-
You need a specialist mortgage to convert the flats back to a house, regular mortgage lenders will not agree to this as the property may be worth less as one property compared to two.
Have a look for a mortgage broker who deals with self-build and property conversions.
Mortgage started 2020, aiming to clear 31/12/2029.1 -
This may be a bridge and then remortgage situation due to the amount of work required. It is more expensive short term finance and you need a robust exit strategy but the lender will give you a period of time (typically 12-18 months) to get the work done often with no payments and then you can remortgage as a single house
It is an option but it won't be cheap2
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