Want to buy 2nd property for development - mortgage advice?

[Sarnie]

mattdaniels said:

Side point but I some people might not be appreciating the difference between an agreement in principle and a mortgage offer.

Agreement in principle = the lender has processed your application forms, done its sums and accepted you and the proposed property as a "good risk" based on the details you provided.

Mortgage offer - the next stage - the lender has carried out its survey/valuation of the property and its other checks, is satisfied, and is committing to an exact amount of cash to give you and awaiting the green light from you.

Sarnie is correct IMHO - if you have a mortgage offer (not just agreement in principle) then the lender has completed their valuation on the specific property in question and the funds are ready for you to access.

Yep, exactly what I was trying to tell him.....

[C Lee Farquar]

And as you are exchanging contracts at the fall of hammer at an auction you need a mortgage offer. In that sense it's no different buying at auction than by conventional means.

The only exceptional risk is that you will have paid for some preliminary conveyancing and a survey fee before agreeing a price. If you don't win the auction you are still liable for those fees, much the same as if a vendor pulled out on you close to exchange.

[torqueofthedevil]

Sarnie said:

mattdaniels said:

Side point but I some people might not be appreciating the difference between an agreement in principle and a mortgage offer.

Agreement in principle = the lender has processed your application forms, done its sums and accepted you and the proposed property as a "good risk" based on the details you provided.

Mortgage offer - the next stage - the lender has carried out its surveys
Ok/valuation of the property and its other checks, is satisfied, and is committing to an exact amount of cash to give you and awaiting the green light from you.

Sarnie is correct IMHO - if you have a mortgage offer (not just agreement in principle) then the lender has completed their valuation on the specific property in question and the funds are ready for you to access.

Yep, exactly what I was trying to tell him.....

Sorry I didn't mean to contradict you earlier, I just meant that when I spoke to the bank they said they wouldn't survey a property before an auction and therefore there wouldn't be a proper offer on the table. Again, I appreciate the advice

[Sarnie]

torqueofthedevil said:

Sorry I didn't mean to contradict you earlier, I just meant that when I spoke to the bank they said they wouldn't survey a property before an auction and therefore there wouldn't be a proper offer on the table. Again, I appreciate the advice

I posted on the first page "Good Luck speaking to the Banks". What you are trying to do is a lot more specialised than what most High Street lenders will be interested in, which will be reflected in the information given by them.

[BoRED S2upid]

torqueofthedevil said:

Thanks for last few replies t Chet are more constructive. There is still so much negativity and pessimism about tho.



Info admit that pat other people seem to start off buying their first investment with cash; then after that they keep remortgaging. It's just getting 50k or more together is pretty hard! Most shave made cash on a house they bought for about 10k in the 90s and sold for 120!

I need t borrow to ge started. Lesson seems to be - get a property where I can get a mortgage - something habitable and then do that up.

My house can't be extended or really improved in value.

Just out if interest here is the info on the place I liked:

Guide price 50k, planning for house to be split into two 2-bedroom flats. Great village location. Windows fitted. Stairs and floors in. The original terrace already has two flats - same size. Just sold for 80k each. Was going to go halves with a mate - seemed fairly low risk.

Say 30 each to buy. 30 to renovate. 20k profit. Very vague estimates.

Looks good on paper and that's probably what will happen for someone. I think the negativity is that in your current position with what you have told us your not going to be able to realistically do it. Gone are the days of 100% mortgages and banks dishing out money left right and centre. If you had 50k cash to buy it in the first place the thread would be much different and far more positive.