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Subdividing a property while having a mortgage
answers_neededpls
Posts: 3 Newbie
I am looking to subdivide a property into two flats but I still have a mortgage (residential) running on it.
My plan is to convert the property into two flats and then move it to a buy to let mortgage which will obviously pay off the exiting mortgage.
The issue now is that will it be possible to carry out this subdivision without the informing the current mortgage company?
My plan is to convert the property into two flats and then move it to a buy to let mortgage which will obviously pay off the exiting mortgage.
The issue now is that will it be possible to carry out this subdivision without the informing the current mortgage company?
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Comments
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Doubt it - the "old" property no longer exists or if it does has a lot lower value as the "new" one.
Think you would have to close down the old mortgage and take out a new one ( or two ) against the new flats.
You'd have to register the changes with Land Registry and as the mortgage company have an interest they'd need to be part of that.
Have you got a conveyancing solicitor?
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Thanks for the information.
No I don't have a conveyance solicitor
If close the current mortgage and get the buy to let mortgage, will be able to make the subdivision under the new mortgage. will the same issue not arise again which is whether the lender will frown at it. And I can not sub divide without getting planning permission.
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The lender won't let you turn the place into a building site. If you don't have the cash then you'd need to refinance to some form of development finance, then remortgage to residential/BTL mortgages(s) once the work is done.2
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what about if I convert it to HMO, will the lender have issues with this option as well?0
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You would nee planning permission and building control involvement in order to carry out the change which might be rejected by LA.
Depending where you are in the country there might be a number of hurdles to creating HMO.
Your lenders concern is that you are changing their known security of a residential property into another unknown entity which might not offer same financial coverage.
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I'd doubt the mortgage would permit it. As mortgage company. Amazingly (who'd have guessed..) different lenders have different rules & procedures. Not much point asking us lot.. but thanks anyway...
And you'll get planning & building contract sign-offs (i.e. documents)??1 -
Check the terms and conditions of your mortgage as they may well state the house is to be occupied by the mortgagor and their family onlyIf you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales1
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