Short Lease - Urgent Advise Please

richiebabes

Is there anyone that can advise me on what to do when I have a short lease and don't know what to do for the best. Increase the lease - costs £16k or sell up and move out. The current lease is only 62 years. I don't want to spend all that money to increase it. Obviously this will affect the value of the property, but I am in a dilemma. I want to re-mortgage anyway, they are aware of the short lease, as I am skint! It's being processed and a good chance of going through despite my credit being bad. I want to pay off my car finance and reduce my monthly outgoings hence the remortgage. I will have a little left over to put in the bank as I have no savings. I really don't want to take out more to increase the lease.

I am in a dilemma whether not to re-mortgage and stay skint! Leave the equity in the "pot" and use that as a deposit in my new home.

I want to pay off the car loan so I don't have that as an outgoing. Got into it stupidly with now an ex so stuck with the payments so would rather just pay it off with the remortgage money and then perhaps sell it to make the money back, if you know what I mean.

I am sure you get my meaning.

Anyway, what do I do.

Please, can someone help or can you point me in the right direction please of who I can talk to/

Thank you.

MortgageMamma

Every lenders policies are different regarding the minimum term of a lease that they will accept. I don't think you need to panic at this point as there are some lenders who will accept a lease of 62 years no problems. It sounds to me like you need some professional advice. are you using a broker?

EdInvestor

richiebabes wrote: »

Is there anyone that can advise me on what to do when I have a short lease and don't know what to do for the best. Increase the lease - costs £16k or sell up and move out. The current lease is only 62 years. I don't want to spend all that money to increase it.

Now is not a good time to sell, especially any property with a disadvantage such as a shorter lease.How do you expect house prices to behave over the next year or two in your area?If they go down, this should reduce the price of the lease extension or at least stop it from rising further as the shorter the lease gets, the more expensive to extend.

Typically what people do is agree a price with the freeholder and then set a sale price for the property which includes recognition of the impact of extending the lease. Then the buyer does the actual extension (usually by adding the cost onto the mortgage).

In some places even much shorter leases than yours will not impact the sale price much if the property and area are very desirable. Is the price you have been offered for the extension fair and reasonable? Is it negotiable?How many years extension does it offer? Could you get the price reduced if you took fewer years?

PS Why don't you just sell the car since you obviously can't afford to run it, and get rid of the loan ? That might make the way forward a bit more clear.

richiebabes

Yes I went through a broker for my remortgage. Should I mention my predicament to them although they haven't raised it as a concern? My worry is not having any funds at the moment and my credit isn't great but it's getting sorted. So I am possibly limited to lenders even looking at my case.

richiebabes

To Ed Investor

Thanks for that. The lease will get extended to over 105 years.

Because I took out car finance they technically still own the car. They could auction it and I would be liable to pay off the difference anyway. I thought I would re-mortgage and pay off the early settlement figure, then I own the car. I could sell it at that point, as I now own it, and put that on my mortgage reducing the amount I owe.

I do need to re-mortgage so I was worried about my lease being only 62 years.

Thanks for your comments and I will ask the leaseholder how much it would be if I extended it a few more years. That's a good point.

Thank you.