Will I be able to Obtain a Mortgage?

by Readers Question

10:17 AM, 7th October 2014
About 4 years ago

Will I be able to Obtain a Mortgage?

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Will I be able to Obtain a Mortgage?

I intend to team up with a friend to purchase a 5 bedroom house for £400K because each of us have a budget of £200K for a house which is not available any more.

Our intention is to split the house into two after purchase but my concern is that with this explanation of our intention to lender, are we going to be able to sail through the mortgage process? Will I be able to Obtain a Mortgage?

Akin Adeyemo



Comments

Mark Alexander

10:24 AM, 7th October 2014
About 4 years ago

Hi Akin

I think your gut instincts are right and your mortgage lenders will run a mile when you disclose your intentions.

If you don't disclose your intentions then you run the risk of your mortgage lender calling in the loan and suing you for breach of contract as soon as they find out what has gone on.
.

Neil Patterson

15:16 PM, 7th October 2014
About 4 years ago

Hi Akin,

If you effectively make the property two self contained units you will be materially affecting the lenders security and its value.

There is no way a standard BTL or residential mortgage lender will agree to this, and Mark is correct, if you are not honest about your intentions upfront they will call in the loan and consider your actions mortgage fraud.

Akin Adeyemo

16:37 PM, 7th October 2014
About 4 years ago

Thanks all for your comments.

Howard Reuben CeMap CeRER

17:06 PM, 11th October 2014
About 4 years ago

So that's the negatives out the way! 🙂

Now for how it can be done (and the following is based on a Client's case that I have recently completed on);

Depending on the level of development / refurb works to be carried out, and making sure that you have a solicitor who knows how to properly arrange the split titles (there will be one freehold and two leaseholds here, I would imagine) then the whole process would be in two stages ... but can all be done with one lender 'on side'.

With the right PP in place, the right schedule of works and detailed breakdown of costs produced and with both solicitor and Broker working closely together, liaising with the lender as well as councils bods too, actually this process is quite straightforward. Not quick, and not without to'ing and fro'ing sometimes, but certainly not impossible.

As above, this is written from recent similar case experience.


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