Is this possible? (leasehold - short lease)

Dino-saw

Hi all

Remaining lease 68 years
Cost to extend by 90 years - c£15k
Mortgage balance remaining - £105k
Property value as is - £167 (according to high street lender)
Property value with extended lease - £200-210 (according to estate agents)

My sister has come to the end of her mortgage deal with a high street lender and will soon be on SVR as they will not lend with a discounted deal due to less than 70 years remaining on lease. 

She has no cash with which to buy the lease extension so is looking to finance it but loans are not cheap (around 10% - so c£300 pcm, which is too much). Her current mortgage provider will not add the required £15k to the SVR mortgage.

IMPORTANT - she hates the apartment so wants to sell it.

I don't think she has the patience to be a landlord for a couple years either.

Ideally, she would find another lender who would take on her mortgage AND increase it by the required £15k to £120k on an SVR - OR other product which gives the flexibility to sell as soon as the lease extension is sorted with minimal redemption.

Is this possible? I've told her to ask her broker, but I suspect there would be nothing in it for the broker? Or indeed the lender, if the property is sold a few months after the new mortgage commences.

Any view would be welcome. Thanks

ACG

Who is the current lender? Surprising they would not allow her to tie into a new deal. I would be interested to know so I know who to avoid for similar customers. 

But in any event, there are lenders out there. Some brokers are fee free and would earn around £200 in commission. I think most brokers would charge a fee of around £300-600 to make it a little more appealing for them - less so for your sister I imagine but it still may be cheaper than sitting on SVR. 

Some products have no ERCs, other lenders allow porting. So potentially plenty of options but also a lot to factor in. As you say, probably one for a broker. 

Dino-saw

ACG said:

Who is the current lender? Surprising they would not allow her to tie into a new deal. I would be interested to know so I know who to avoid for similar customers. 

But in any event, there are lenders out there. Some brokers are fee free and would earn around £200 in commission. I think most brokers would charge a fee of around £300-600 to make it a little more appealing for them - less so for your sister I imagine but it still may be cheaper than sitting on SVR. 

Some products have no ERCs, other lenders allow porting. So potentially plenty of options but also a lot to factor in. As you say, probably one for a broker. 

HSBC. 
She's asking her broker so I'll let you know. Problem is, I never get a straight answer out of her because I'm not sure she's asking the right questions!

gwynlas

Would she be willing for you to sit in on meeting with her broker so that you could ask some questions?

Dino-saw

gwynlas said:

Would she be willing for you to sit in on meeting with her broker so that you could ask some questions?

I doubt it but I can ask. She's the 'independent' type, which is why she's in this position in the first place. We she the stress and only then do some details get squeezed out of her.

Dino-saw

Nationwide has offered her the mortgage she needs at SVR for £900 - no exit fee. I think its the best option for her given circumstances. The fee negotiated is actually less than the calculator said it would be, so fingers crossed.