I went Sale Agreed on a property a few weeks ago.
The house is in poor repair and following valuation, the bank were prepared to advance me the 92% of the purchase price (just over 200K), and following completion of modernisation works, were prepared to release the rest of the 230K that I wished to borrow. They estimated that the house would by then by worth 260K.
They ran into difficulty with their own insurers, as the house does not currently have a bathroom - there is an outside toilet, connected to public sewerage, but no inside bathroom (this obviously was part of the modernisation works). They have declined to offer the mortgage as they cannot obtain insurance on the loan (it is over 80% of the purchase price, and it seems they need insurance on all loans over this amount). I am assured that my credentials check out and that the insurance policy is the only clanger in the deal.
My broker has entered another application with another institution, but I would expect to have the same problem again.
Any idea what other options I might have to finance the job?
If the sale falls through, can I obtain a letter from the bank(s) stating what the problem is in order to I save face with the auctioneer? This is a relatively small town, and I would hope to buy something else if this doesn't work out. Again, the finance was in order before I made my bids on the property, and it is just the fact that the property cannot be used as security on the mortgage.
Thanks, Mel.
The house is in poor repair and following valuation, the bank were prepared to advance me the 92% of the purchase price (just over 200K), and following completion of modernisation works, were prepared to release the rest of the 230K that I wished to borrow. They estimated that the house would by then by worth 260K.
They ran into difficulty with their own insurers, as the house does not currently have a bathroom - there is an outside toilet, connected to public sewerage, but no inside bathroom (this obviously was part of the modernisation works). They have declined to offer the mortgage as they cannot obtain insurance on the loan (it is over 80% of the purchase price, and it seems they need insurance on all loans over this amount). I am assured that my credentials check out and that the insurance policy is the only clanger in the deal.
My broker has entered another application with another institution, but I would expect to have the same problem again.
Any idea what other options I might have to finance the job?
If the sale falls through, can I obtain a letter from the bank(s) stating what the problem is in order to I save face with the auctioneer? This is a relatively small town, and I would hope to buy something else if this doesn't work out. Again, the finance was in order before I made my bids on the property, and it is just the fact that the property cannot be used as security on the mortgage.
Thanks, Mel.
