Should I buy a non standard construction property cash and then re-mortgage it?

Posted on 07. Nov, 2012 by admin in Glenn's Blog

This was the question recently asked on my weekly deal clinic:

“I am planning to buy non standard construction house with slight structual damage for cash then refurb and re mortgage.  I don’t want to pull out at this stage but dont want to be left with a lemon. Any advice please”?

My answer was….

Key to this is, that you are going to pay cash for the property and then risk getting a remortgage. You are very restricted to mortgage companies that will mortgage non standard construction types of properties. You may get a commercial mortgage on it with someone like Shawbrook but typically the only people who will mortgage non-standard construction properties is Birmingham Midshires. So if you can get a mortgage with BM, what I would recommend is that you actually take the mortgage out with BM when you buy it, do it up and then re-mortgage it in 6 months and put use of their products that will allow you to do this without penalty. That way, as you are buying it on a mortgage, you are going to know that it is mortgageable and not find out the hard way.

I wouldn’t take a chance in buying anything at all that has got any chance of not being able to get a mortgage. Alternatively, if you went to Connells surveyors (or go into one of the branches) and employ them to give you a survey on the property. When you come to do the mortgage, if you actually ask them about whether or not BM would mortgage it, if you then go back to Connells mortgage brokers and take a mortgage out with Connells, for the property that they originally valued, that way you have already had it agreed that it is mortgageable.
I really wouldn’t want to take a chance and risk of buying it and not being able to sell it because nobody else can get a mortgage.

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