Financing an un mortgagable property

[speedyman]

If I were to buy an un-mortgageable property (no kitchen) as a fixer upper??? Whats the best way to finance it. Bridginging loan ???

[archie456]

Why does the house having no kitchen make you unable to get a mortgage on it?

[Sarnie]

archie456 said:

Why does the house having no kitchen make you unable to get a mortgage on it?

Because the property needs to be habitable............no kitchen and it's deemed not to be habitable.....

[Wacky Racer]

speedyman said:

If I were to buy an un-mortgageable property (no kitchen) as a fixer upper??? Whats the best way to finance it. Bridginging loan ???

Why not "fix it" so it incorporates a small kitchen by playing about with the room layout?

[speedyman]

Because I have to buy it first, I cant fit the kitchen

[Wacky Racer]

speedyman said:

Because I have to buy it first, I cant fit the kitchen

I understand that, but can't you say to the lender the first thing I will do when I move in is fit a kitchen...then they hold a small retention, and release it to you when you show them the work has been done to their satisfaction.

Not an expert btw, probably Sarnie is your man.

[anonymous-user]

I can't help on the finance but I needed an address so I bought an un morgagable property 2 years ago, old lady got a grant but died before work was finished nice three bed end ter with a garage, and house had new roof, floors, kitchen, bathroom, windows etc but subsidence in the garden, made a cash offer, that was 50% of the asking price and it was accepted. Agent said he could sell high end property for cah no problem, barn conversions holiday homes etc, but a family type/first time buyer home for cash was almost unknown, so watch the price you give.
Had the garden put right, it was a great investment.

[98elise]

Wacky Racer said:

speedyman said:

Because I have to buy it first, I cant fit the kitchen

I understand that, but can't you say to the lender the first thing I will do when I move in is fit a kitchen...then they hold a small retention, and release it to you when you show them the work has been done to their satisfaction.

Not an expert btw, probably Sarnie is your man.

That's not how it works with mainstream lending. For a traditional mortgage they want it to be habitable. Ifs its not habitable there there could be a number of other undisclosed issues and its the mortgage company taking the risk.

I'm not saying you can't get finance, or even a mortgage but it will not as simple as a traditional mortgage.

[98elise]

Berw said:

I can't help on the finance but I needed an address so I bought an un morgagable property 2 years ago, old lady got a grant but died before work was finished nice three bed end ter with a garage, and house had new roof, floors, kitchen, bathroom, windows etc but subsidence in the garden, made a cash offer, that was 50% of the asking price and it was accepted. Agent said he could sell high end property for cah no problem, barn conversions holiday homes etc, but a family type/first time buyer home for cash was almost unknown, so watch the price you give.
Had the garden put right, it was a great investment.

Sounds strange i see family homes going through auctions all the time, and for pretty strong money. Last time I looked at a family home in my area it had a massively overgrown garden, needed a complete refurb, and had single split AC as the heating system. It sold for about 15k off the average street price.

[Sarnie]

Wacky Racer said:

I understand that, but can't you say to the lender the first thing I will do when I move in is fit a kitchen...then they hold a small retention, and release it to you when you show them the work has been done to their satisfaction.

Not an expert btw, probably Sarnie is your man.

Thanks, but it needs to be habitable at the point of when the mortgage surveyor goes out to visit the property. This isn't the sort of thing a retention would be applied to. The mortgage lender always works on a worst case scenario, which in this case would be "what if the applicant doesn't install a kitchen and we have to repossess the property....."

[13m]

speedyman said:

If I were to buy an un-mortgageable property (no kitchen) as a fixer upper??? Whats the best way to finance it. Bridginging loan ???

It's a fact that mainstream lenders won't usually lend on a property with no kitchen. It matters not that a competent DIYer could probably fit a functioning one in about an hour, if one had been there previously. Them's the rules and no amount of "but why not ask the lender to... but that's silly... why can't you..." is going to change the situation. They don't do it.

So, who will lend? Banks with a commercial loan, bridging financiers, private investors, family. Though you'll likely need a bigger deposit and pay more in fees and interest.

[AyBee]

Anything you can build into a contract prior to purchase? i.e. pay to have a "kitchen" fitted prior to purchase of the house from the vendor with suitable recompense if the vendor then pulls out?

[speedyman]

Seller wants a quick sale. Property has been empty for six years and its been used as a squat/drug den. There are at least 20 potential buyers in the wings, I presume builders/proffessionl investors with cash. Its near me and priced well below nearby property. I just dont have the funds for an outright purchase and do it up. I could do up to 50% deposit though.

[DonkeyApple]

speedyman said:

Seller wants a quick sale. Property has been empty for six years and its been used as a squat/drug den. There are at least 20 potential buyers in the wings, I presume builders/proffessionl investors with cash. Its near me and priced well below nearby property. I just dont have the funds for an outright purchase and do it up. I could do up to 50% deposit though.

Then offer him the 50% cash that you have as your full offer.

If it's a bargain at the price he is asking then it would have gone in seconds. If he can't be arsed to install a kitchen then he is either desperate or knows there are other problems other than just the kitchen.

[Ozzie Osmond]

Sarnie said:

Thanks, but it needs to be habitable at the point of when the mortgage surveyor goes out to visit the property.

^^ Correct. Many properties end up at auction precisely because they are not saleable to normal buyers as a result of being unmortgagable.

If you already own the house you live in you can consider getting/increasing a mortgage on that house and then spending the cash to buy the fixer-upper.

[Stevemr]

Are you buying it to live in or to rent out?

[528Sport]

There are afew lenders/brokers who can help

bridging loan is one way HAVE AN EXIT PLAN please :-) exit plan can be simply on to a mortgage Greenfields can help.

look on google for light refurbishment mortgage.

http://www.greenfieldfinance.co.uk/contact/

http://www.mortgagesforbusiness.co.uk/property-fin...


As a residential mortgage youve no chance. you need a specialist broker.

[tleefox]

OP - where are you based?

[Who Me]

speedyman said:

Seller wants a quick sale. Property has been empty for six years and its been used as a squat/drug den. There are at least 20 potential buyers in the wings, I presume builders/proffessionl investors with cash. Its near me and priced well below nearby property. I just dont have the funds for an outright purchase and do it up. I could do up to 50% deposit though.

Im afraid lenders dont see sense at times, you can do a 50% deposit so even if it goes t1ts up they could repossess and just sell at auction to get the money back but its not that simple in the real world. Banks and lenders will happily give 50k of debt on credit and store cards and just right it off when the person declares bankrupt but trying to raise finance for certain types of property they dont like.

[Ozzie Osmond]

The problem the bank has is that it's extremely difficult to value an "unsalable property". All sorts of people pay all sorts of stupid prices for things at auction. So why should the bank bother to take the risk?