Small mortgage required on freehold flat, no mutual deed of covenenant

LisaSoulGirl

Hi Money Savers

I'm looking for some ideas/ advice.  Earlier this year, I bought a freehold flat, with cash.  (That's actual freehold, not share-of-freehold. These flats are common in some parts of the country.)  The flat is one of a block of 4, and it does not currently have an enforceable mutual deed of covenant.  At the time, I needed to bump up my capital and so I took out an unsecured loan of £20k over 10 years at 16.4% to buy it.  I would really like to be borrowing at a lower interest rate, ideally I would like to have a mortgage on the property, however, NatWest are the only company which will lend on freehold flats, and as my flat does not have a mutual deed of covenant, it does not qualify, so I can't get a mortgage even for that small amount.  Has anyone heard of mortgage lenders that will lend primarily on income?  Flat is worth about £260, so it's not like they couldn't recoup their investment, if they had to...

user1977

£260?………..

MWT

LisaSoulGirl said:

NatWest are the only company which will lend on freehold flats, and as my flat does not have a mutual deed of covenant, it does not qualify, so I can't get a mortgage even for that small amount.  Has anyone heard of mortgage lenders that will lend primarily on income?  Flat is worth about £260, so it's not like they couldn't recoup their investment, if they had to...

Your income is what qualifies you as being able to repay the loan, the flat and the ability to sell it if needed is the security for the loan.

If you don't have the mutual deed then it isn't very appealing as security for a mortgage...

A bit circular i know, but this sounds like a property that only a cash buyer is going to be able to purchase and that makes it unappealing for a lender.

Also consider that with such a small mortgage at stake there isn't enough in it to make it worth any special effort on the part of lenders, or brokers for that matter.