Impossible to mortgage this property?

locostashton

Hi All,
im trying to get a mortgage on a house that will likely need rewiring, new heating/plumbing system, brickwork in window areas repaired (failed or no lintels). There’s a kitchen but I can’t test the water as it’s turned off. The valuer has said it’s worth what I’m willing to pay for it, but it’s against the mortgage lenders policy to lend against a property that isn’t habitable. Is there a lender or specific mortgage product that might lend in this situation? I’m fully aware of the condition of the property and would really like to find a way to buy it. Thanks 

hazyjo

Can you put up a link? Is it actually inhabitable, or does it just need doing up?

locostashton

It’s been taken down at the moment. I’m happy to have the electrical/plumbing work done before moving in, the brickwork can be done without effecting the inside, I’m told. So, yes, I believe it’s habitable.

CSI_Yorkshire

locostashton said:

So, yes, I believe it’s habitable.

Habitable means a specific thing, not just "are you willing to live in it".  Check the criteria the lender uses to define habitable.

user1977

Why specifically does the surveyor consider it not mortgageable? 

propertyrental

Speak to an independent mortgage broker. He'll either recommend a lender with a more flexible definition of 'habitable', or recommend a development mortgage.

https://www.fundingoptions.com/knowledge/property-development-finance/

locostashton

The valuation says the house is worth the amount I want to borrow, it’s the building society policy not to lend. The valuer has said it potentially needs rewiring/plumbing and potential structural issues but hasn’t mentioned getting a structural survey or that the house is only worth x amount of money

eddddy

locostashton said:

The valuation says the house is worth the amount I want to borrow, it’s the building society policy not to lend. The valuer has said it potentially needs rewiring/plumbing and potential structural issues but hasn’t mentioned getting a structural survey or that the house is only worth x amount of money

You should ask what specific issues are making that specific house "uninhabitable".

Normally "uninhabitable" means - no working kitchen, or no working bathroom, or maybe not watertight and windproof.

Needing rewiring / plumbing isn't usually an issue - unless the plumbing is so bad that the kitchen or bathroom can't function.


However, you mention "potential structural issues". They wouldn't necessarily make the house "uninhabitable" - but they could definitely make a house unmortgageable. 

user1977

eddddy said:

locostashton said:

The valuation says the house is worth the amount I want to borrow, it’s the building society policy not to lend. The valuer has said it potentially needs rewiring/plumbing and potential structural issues but hasn’t mentioned getting a structural survey or that the house is only worth x amount of money

However, you mention "potential structural issues". They wouldn't necessarily make the house "uninhabitable" - but they could definitely make a house unmortgageable. 

Or more likely "only mortgageable after you get a structural engineer to declare my concerns are misplaced".

K_S

locostashton said:

Hi All,
im trying to get a mortgage on a house that will likely need rewiring, new heating/plumbing system, brickwork in window areas repaired (failed or no lintels). There’s a kitchen but I can’t test the water as it’s turned off. The valuer has said it’s worth what I’m willing to pay for it, but it’s against the mortgage lenders policy to lend against a property that isn’t habitable. Is there a lender or specific mortgage product that might lend in this situation? I’m fully aware of the condition of the property and would really like to find a way to buy it. Thanks 

@locostashton

Mainstream standard mortgage - You could get a good picture of how a mainstream lender evaluates whether a property is 'habitable' or not by going through this Nationwide surveyor manual https://nonstandardhouse.com/wp-content/uploads/wpforo/default_attachments/1541599588-361Valuers-Nationwide-Whole-Manual-11-March-2016.pdf  Most mainstream lenders will have a similar approach. As you can see from the guidance, there is some amount of subjectivity to it.

If the above is a no-go, then you'll need to look at something like buying the property using a bridging loan, repairing/refurbishing it and then re-mortgaging it to a mainstream lender. This thread might be useful as it's discussing a similar issue
https://forums.moneysavingexpert.com/discussion/6452176/estimating-providing-refurbishment-costs