Mortgages and splitting the deeds of a property

[bmt216a]

Hi,
Currently own a small farm. This includes the farm house and two agricultural barns which I’ve currently put planning in under class Q to convert. I want to selfbuild and live in one of the barns but will need a selfbuild mortgage.

I need to split the deed on the property so the barns are separate to farm house. My mortgage adviser has told me no high street lender will entertain this as its currently got a mortgage on it and the only way round this is to put the farm house on a bridging loan then instruct the solicitor to split the deed then re apply for a mortgage on just the farm house so the barns would then be mortgage free.

Has anyone been in this situation and can offer some advise. I’m not 100% the mortgage advisor is correct.

Regards
Ian

[Sarnie]

Doesn't sound right to me...........

[JulianPH]

I can see the logic in the current mortgage provider not wanting to give up assets currently secured against the original loan, but not the whole bridging loan route.

Surely it is a simple matter of revaluing the land/property you wish to retain under the original/existing mortgage to ascertain if this fits with the current lender's criteria (or that of a new lender).

Get in touch with Liam (Sarnie, above), he is our resident mortgage broker and seriously knows his stuff.

[Sarnie]

JulianPH said:

I can see the logic in the current mortgage provider not wanting to give up assets currently secured against the original loan, but not the whole bridging loan route.

Surely it is a simple matter of revaluing the land/property you wish to retain under the original/existing mortgage to ascertain if this fits with the current lender's criteria (or that of a new lender).

Agreed........current lender is unlikely to want their security reduced............you'd just inform the new lender of how the land and titles are being split.........the issues I can see would be;

- The main house on it's own may now not be of sufficient value once the additional buildings are removed from the title?
- The new lender will want exact details of how all the buildings are proposed to be used.......Eg if one was to be a holiday let for example, they may not like that.....

Speak to a conveyancer first........gauge what they propose.......then speak to someone who doesn't seem to want you to take a bridging loan out unnecessarily......

[bmt216a]

Cheers guys. My 2 year fix is up, just ploughed £60k in to the farm house so should’ve increased value. This is why I’m looking to change my mortgage with deeds changed. Currently with Halifax, they’re being funny about the whole approach. I’ll get in touch with sarnie 👍🏻

[stut4]

bmt216a said:

Hi,
Currently own a small farm. This includes the farm house and two agricultural barns which I’ve currently put planning in under class Q to convert. I want to selfbuild and live in one of the barns but will need a selfbuild mortgage.

I need to split the deed on the property so the barns are separate to farm house. My mortgage adviser has told me no high street lender will entertain this as its currently got a mortgage on it and the only way round this is to put the farm house on a bridging loan then instruct the solicitor to split the deed then re apply for a mortgage on just the farm house so the barns would then be mortgage free.

Has anyone been in this situation and can offer some advise. I’m not 100% the mortgage advisor is correct.

Regards
Ian

sounds like the MA is just trying to flog a bridging deal.
speak with your current mortgage lender who lenders on the entire plot as it stands at present.
tell them you want to section off part of the land under their security.
you'll need to send a title plan and possibly a valuation fee.
their valuer will then determine if the size of the plot remaining is sufficient to be adequate security for the existing loan.
if they agree, that seciton of land will be released from the deeds on the existing mortgage.
it'll then be possible to secure a new loan/mortgage on the released land.

i helped one of my old clients do something like this around 6-7 years back when they had a mortgage with Coventry BS - wanted to release part of the land on that property/mortgage to do a self build.
i assumed farm/commercial lenders would take the same kind of view.