Mortgage to buy house nxt door

trux

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My neighbours house, which is the other side of our semi-d has come up for sale. We were about to put our own house up & still plan to (need a bigger house) but are wondering if we should consider buying next door & knocking the two together.

Theoretically, if planning wasn't an issue, how would lenders treat such a scenario? We would have the value of a 10% deposit to buy nxt door. Would it be a case if getting a new mortgage for next door or would we have to combine our current mortgage with the new one??

Anyone any ideas how this might work?
 
I would be more concerned about the fact that the LA may not allow you consider it as one dwelling so two lots of LPT, fixed charges etc.
 
We'll have to look into all that as well, but as a starting point I'm interested in the financials of it all.
 
The banks could classify it as an Investment property and this would command a higher rate of mortgage interest probably 1%. You will be coming into the new CB proposals for lending where you might need 30% of the price of it. If it is classified as an Investment property you will need to allow for a fee of €1500.00 or thereabouts for the banks solicitor and you will have to pay for your own as well.
I would imagine it will be a new mortgage.
It will cost quite an amount with fees of various kinds to get to the conversion stage and that will not be as simple as you may think.
There is another aspect to this as well and that is "Will the converted house be worth the price of the two houses plus all the costs. I think maybe not.
Could you buy a bigger house locally for less than this plan that you are considering.
 
"Will the converted house be worth the price of the two houses plus all the costs. I think maybe not.

I think that this may be the issue here. If you have a low mortgage on your existing property the bank may consider the proposal based on the fact that the percentage borrowed overall may be acceptable to them.

Should the bank need to repossess they would have to reconvert the property back to two separate dwellings. This is to much work for them.
 
Thanks for the replies guys. So I spoke to my broker yest evening. It seems to buy nxt door we have 2 options. One house, one mortgage so the lender for the mortgage nxt door would expect us to remortgage our existing loan and join it to the new one. This would mean needing a deposit to cover the combined new mortgage, which we don't have right now. Option 2 would be to say we're buying next door to live in & we're going rent out our own and effective wait until we had raised the money to cover the deposit needed to combine both mortgages.

So it's way more complicated than we thought & not really a runner. Such a pity really as it would have meant we could have had the size house we were looking for more or less where we want it...
 
Hi trux

Have you had an architect check it out to see if they could be converted easily? And then to see if planning permission could be got?

If it is possible, then you could ask a friend or family member to buy it as an investment and rent it out until you are in a position to buy it. With stamp duty reduced to 1%, such transactions are viable solutions now.

Brendan
 
Hi trux

Have you had an architect check it out to see if they could be converted easily? And then to see if planning permission could be got?

Agree about getting architect to check out the conversion possibilities. The planning will be only an opinion as you are unlikely to have time to get full planning as the house is up for sale

If it is possible, then you could ask a friend or family member to buy it as an investment and rent it out until you are in a position to buy it. With stamp duty reduced to 1%, such transactions are viable solutions now.

Yes you could do all of that but while the stamp duty is only 1% you will have that cost again when you are buying it back. You will have multiple legal fees. You will have 2 Property registration fees etc. It all adds up not to mention how you can cover the profit/loss of a third party renting it out. It sounds a bit costly and messy to me. You have 10% of the possible price of this house. It would not take long for it to evaporate with fees and then you have nothing to use to convert the house.
We do not have any figures but my hunch it is not a runner. Sorry.
 
thanks Brendan/Dermot

My brother in law is an architect and we had a quick chat to him over the weekend. He said it would be a hugely expensive undertaking, so along with that and the fact the mortgage issue would also be so complex, we've well and truly drawn a line under it now.

At least we can say we looked into it anyway, it seems the most straight forward plan is our original one - sell our own house and move to a bigger one!

thanks to all for their feedback.
 
Thanks trux. Genuinely hope it all works out for you and the family into the future
 
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