Can’t remortgage my property due to main residence link?

by Readers Question

10:51 AM, 18th January 2017
About 2 years ago

Can’t remortgage my property due to main residence link?

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Can’t remortgage my property due to main residence link?

Hi guys I’m new here. Last year we purchased a property for £27,000 for cash and renovated it we waited for the 6 months to try to remortgage, the estimated value is around £65,000/£70,000 we had The Mortgage Works out to value it to get a buy to let mortgage on the property, but when they done the valuation and searches it turned out that my residential property and the property that we bought had a link of some sort and “The Mortgage Works” couldn’t Lend us the money. link

My mortgage advisor has said that all the other lenders would be the same as The Mortgage Works. My dilemma is that I need to remortgage the property to get money out to fund another buy to let.

Does any one know how I could or recommend a company that I could speak to about remortgaging or getting a loan on the property.

Any help would be much appreciated

David



Comments

Neil Patterson

10:54 AM, 18th January 2017
About 2 years ago

Hi David,

The key to this question is what is the type of link?

Is it a physical link/connection to your main residence and if so how?

Or is it a legal or restrictive link to your main residence?

David redmond

15:52 PM, 18th January 2017
About 2 years ago

The property we bought last year was off my partners step father, so the only reason I can think of is that they think we're related in some way, my mortgage broker has queried this with the mortgage company and they won't disclose any more information my mortgage broker has said that all the other lenders will be the same, I've bought and remortgaged over 20 property's in the last 10 years and never had a problem with any of the others
I was just wondering would I still be able to pull my money out other ways I don't want to go down the bridging loan route

Neil Patterson

16:15 PM, 18th January 2017
About 2 years ago

Hi David,

There is definitely some missing information here and you will need to find out what this is before you expend any further energy or credit checks with other lenders.

I would have a conversation with the solicitor that did the purchase transaction for you to see if they can shed any light.

David redmond

16:28 PM, 18th January 2017
About 2 years ago

I've already spoke to my solicitor and he doesn't understand he's checked the land registry and all is ok there
The mortgage works won't disclose any more information about what they have picked up on there checks like you said I don't want to keep paying for surveyors and they keep picking up on some link
Would it be something about my partner and step father could that be an issue

Neil Patterson

16:33 PM, 18th January 2017
About 2 years ago

Was there anything at all unusual about the purchase from your step father or in any way different form an unrelated purchase?

I would also ask your step father if he has any credit issues or previous mortgages declined or unusual property related activity that lenders may be aware of.

David redmond

18:09 PM, 18th January 2017
About 2 years ago

No nothing unusual about it we bought it below market value as my partners step fathers dad went into a nursing home and they needed to pay off the fees so he sold it to us at a good price
My mortgage broker can't understand it either and my solicitor says everything is fine also
Would there be any other way to get funds out of the property now I was hoping to potentially get £40,000-£50,000 with the remortgage

Puzzler

18:36 PM, 18th January 2017
About 2 years ago

Has the council put a restriction on it because you got it cheap? You may have to cough up for the true value of the house if the money runs out and your relative is deemed to have intentionally deprived himself of funds. This might be why a lender won't touch it. You would be well to find out so that you are in a position to do so. Ask if you will have a problem selling it.

Neil Patterson

19:05 PM, 18th January 2017
About 2 years ago

Ah that is what is unusual.

This will be perceived as hiding funds from the local authority that may be needed in the future for Nursing care. They will try and recover money spent from you if your step dad runs out of funds himself.

Therefore the lenders security is compromised.

David redmond

20:08 PM, 18th January 2017
About 2 years ago

No when we bought the property that's all they wanted for it £27,000 I would have paid more but they said that's all they wanted, the £27,000 more than covered the nursing home fees
I don't think me buying the property cheaply has anything to do with the mortgage companies decision

H B

7:02 AM, 19th January 2017
About 2 years ago

I suspect that the price is likely to be behind this. What was the genuine market value of the property at the time? My guess is many times this.

A sale of a property to a family member at BMV for BTL might be seen as an IHT dodge. The lender might suspect that the seller then becomes "the tenant" of their own house.

HMRC might reject this in the future and demand full IHT on the property, making you more likely to default on the property.

The more I think about it, the more I wouldn't touch the mortgage with a barge pole if I were a lender.

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