Buying the freehold

theshoefairy

Well I have been refused a mortgage so that's out of the window

sancahojo

theshoefairy said:

But, saying that I do have a lot of followers on twitter due to a certain issue, should I possible put a post on there setting out the idea first?If  people take issue with it obviously I will write it off as a bad idea

Try it

NameUnavailable

theshoefairy said:

Well I have been refused a mortgage so that's out of the window

I'm not sure if you can get a mortgage to fund a lease extension/freehold purchase. Did you speak to a mortgage/finance broker about it?

theshoefairy

I spoke to Halifax about taking out a mortgage against the property. Even though I could afford the repayments, my earnings due to working part time are too small. 

eddddy

theshoefairy said:

I believe the house to be valued at around £130 online, but it's not in a great state of repair so I'm thinking less. Would a lower value on the house decrease the value of the freehold? 

Just to help you look at another option...

• I guess it means that house might be worth £130k if it's freehold or has a long lease.  It would be worth much less with a 12 year lease.

• If the freehold really is worth £50k, that might mean you could sell the flat for maybe £60k to an investor (maybe at auction).

• The investor would then pay £60k for your lease, and £50k for the freehold (total = £110k), and end up with a house worth £130k.

(But online valuations can be way out, and the freehold might be worth much more than £50k.)

NameUnavailable

theshoefairy said:

I spoke to Halifax about taking out a mortgage against the property. Even though I could afford the repayments, my earnings due to working part time are too small. 

I'm pretty certain that they wouldn't lend against any property with a 12 year lease.

Speak to a mortgage/finance broker who can find more specialist lenders who might be able to help.

unkle

eddddy said:

theshoefairy said:

I believe the house to be valued at around £130 online, but it's not in a great state of repair so I'm thinking less. Would a lower value on the house decrease the value of the freehold? 

Just to help you look at another option...

• I guess it means that house might be worth £130k if it's freehold or has a long lease.  It would be worth much less with a 12 year lease.

• If the freehold really is worth £50k, that might mean you could sell the flat for maybe £60k to an investor (maybe at auction).

• The investor would then pay £60k for your lease, and £50k for the freehold (total = £110k), and end up with a house worth £130k.

(But online valuations can be way out, and the freehold might be worth much more than £50k.)

The investor could just buy the freehold (lets assume for £50k) and sit it out for 12 years. I think unless very very cheap you'd struggle to sell the house with a 12 year lease. But agree if you could sell it, for say £60k and that allows you to buy something else that might be the best way forward. Don't know the area in question so don't know how feasible that is.

Slithery

Unfortunately plan B is to start figuring out where you are going to move to in 12 years time.

NameUnavailable

unkle said:

eddddy said:

theshoefairy said:

I believe the house to be valued at around £130 online, but it's not in a great state of repair so I'm thinking less. Would a lower value on the house decrease the value of the freehold? 

Just to help you look at another option...

• I guess it means that house might be worth £130k if it's freehold or has a long lease.  It would be worth much less with a 12 year lease.

• If the freehold really is worth £50k, that might mean you could sell the flat for maybe £60k to an investor (maybe at auction).

• The investor would then pay £60k for your lease, and £50k for the freehold (total = £110k), and end up with a house worth £130k.

(But online valuations can be way out, and the freehold might be worth much more than £50k.)

The investor could just buy the freehold (lets assume for £50k) and sit it out for 12 years. I think unless very very cheap you'd struggle to sell the house with a 12 year lease. But agree if you could sell it, for say £60k and that allows you to buy something else that might be the best way forward. Don't know the area in question so don't know how feasible that is.

Here's a thought, if there is no viable option to afford the freehold, put the house up for sale in the same auction as the freehold......might maximise the potential sale price for a house with a 12 year lease if a buyer can snap up the house and freehold at the same time.

princeofpounds

Don’t give up on financing talking to one high st bank. Worst place you can go for mortgage advice apart from Big Jim down the pub.

Speak to a specialist broker. They may also be able to source bridging options until you buy the freehold and/or extend the lease, if necessary.