Transfer of Equity Mortgage - Ex Council house
Discussion
Hoping for a bit of advice, as I feel a little letdown by my lender. I'm in the process of buying my ex partner out of our house that we bought via a joint mortgage from the local council. We are 2.5 years into a 5 year charge on the property due to the discount element. The charge falls in value over the 5 years, and will eventually expire entirely after the term.
I have my sole mortgage accepted in writing from my lender, all the papers with my solicitor, who has an offer letter ready to send to my ex regarding the buyout figure. I am adding the buyout amount to my mortgage.
My solicitor emailed me today with the following response from the local council: 'The legal department have advised they can only provide their consent to any additional borrowing that is for home improvements only, as they consider any home improvements would increase the value of the property. They cannot consent to any other purpose for raising additional funds'
I have no clue at all why the council would respond in such a way. I have emailed my mortgage lender to ask if any other avenues can be explored, and also why I wasn't made aware this could be an outcome prior to my mortgage application - as I would have checked with the council from the off. Would anyone have any suggestions, and how I can resolve it ? Or have I go no chance? All my solicitor has recommended is to contact my lender, and also contact the council's legal department - which I have no doubt will just recite the email they sent.
I see my options as wiping the additional borrowing off my sole mortgage, and getting a personal loan. Problem is, I'll likely only be offered a 5 year term which will make this plus my mortgage a massive stretch for me, and the overall cost of borrowing with be substantially higher. Also, I could just ride out the next 2.5 years until the council charge runs out, and repeat the process. The downside of that is the property could be worth more by that time, meaning I'll have to pay my ex proportionally more !
I'm very inexperienced with mortgages and this kind of stuff, so would be grateful of any pointers.
I have my sole mortgage accepted in writing from my lender, all the papers with my solicitor, who has an offer letter ready to send to my ex regarding the buyout figure. I am adding the buyout amount to my mortgage.
My solicitor emailed me today with the following response from the local council: 'The legal department have advised they can only provide their consent to any additional borrowing that is for home improvements only, as they consider any home improvements would increase the value of the property. They cannot consent to any other purpose for raising additional funds'
I have no clue at all why the council would respond in such a way. I have emailed my mortgage lender to ask if any other avenues can be explored, and also why I wasn't made aware this could be an outcome prior to my mortgage application - as I would have checked with the council from the off. Would anyone have any suggestions, and how I can resolve it ? Or have I go no chance? All my solicitor has recommended is to contact my lender, and also contact the council's legal department - which I have no doubt will just recite the email they sent.
I see my options as wiping the additional borrowing off my sole mortgage, and getting a personal loan. Problem is, I'll likely only be offered a 5 year term which will make this plus my mortgage a massive stretch for me, and the overall cost of borrowing with be substantially higher. Also, I could just ride out the next 2.5 years until the council charge runs out, and repeat the process. The downside of that is the property could be worth more by that time, meaning I'll have to pay my ex proportionally more !
I'm very inexperienced with mortgages and this kind of stuff, so would be grateful of any pointers.
Phone the Council’s legal or Housing department. They’re usually very helpful.
There are various rules/restrictions around RTB in relation to “reselling” the property within the 5 year period. (Basically Councils don’t want to give tenants a mahoosive discount only for the tenant to resell the Property at market rate, pocket the difference and then move back onto the waiting list for another Council House). That’s why they put in lace lots of fiddly little barriers to prevent this. That MAY be why you’re having problems remortgaging.
There are various rules/restrictions around RTB in relation to “reselling” the property within the 5 year period. (Basically Councils don’t want to give tenants a mahoosive discount only for the tenant to resell the Property at market rate, pocket the difference and then move back onto the waiting list for another Council House). That’s why they put in lace lots of fiddly little barriers to prevent this. That MAY be why you’re having problems remortgaging.
Countdown said:
Phone the Council’s legal or Housing department. They’re usually very helpful.
There are various rules/restrictions around RTB in relation to “reselling” the property within the 5 year period. (Basically Councils don’t want to give tenants a mahoosive discount only for the tenant to resell the Property at market rate, pocket the difference and then move back onto the waiting list for another Council House). That’s why they put in lace lots of fiddly little barriers to prevent this. That MAY be why you’re having problems remortgaging.
That's my first port of call. I already have a joint mortgage, hence the transfer of equity/sole mortgage as against a purchase or sale of the place. I'm just at a loss as to why the council's legal department won't authorise additonal funds on top of the mortgage - its not even 50% of the property value. There are various rules/restrictions around RTB in relation to “reselling” the property within the 5 year period. (Basically Councils don’t want to give tenants a mahoosive discount only for the tenant to resell the Property at market rate, pocket the difference and then move back onto the waiting list for another Council House). That’s why they put in lace lots of fiddly little barriers to prevent this. That MAY be why you’re having problems remortgaging.
80quattro said:
That's my first port of call. I already have a joint mortgage, hence the transfer of equity/sole mortgage as against a purchase or sale of the place. I'm just at a loss as to why the council's legal department won't authorise additonal funds on top of the mortgage - its not even 50% of the property value.
The answer is in your first post essentially................you can't raise funds on a RTB for any other reason than home improvements usually..............Gassing Station | Finance | Top of Page | What's New | My Stuff