Mortgage and building advice please

1mm3

1mm3

1mm3

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26 Oct 2006
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1,071
House asking price: £y
4 bed terraced

The house is in an area which is close to my parents (where i am living at the moment). There aren't many houses available for sale in the area atm and the house is an end-terraced (very important as i would like to create a back yard garage with access from the side).

There have been a few offers since the house was put up for sale:
<x (not me- rejected)
x (not me- asked for bit more)
x+1000 (me- asked for bit more)
x+2,500 (me- are considering offer, want my solicitor details and will get back to me in 24 hours)
the estate agent thinks we will be able to close at x+5000

I want to put lodgers in the house and convert the back yard into a garage which only i will have access to.

2 questions:
1. Am i allowed to seal off the back yard from the rest of the property, create a garage with access from the side to park a car in? (currently only access from back with door/gate no car access, there are numerous other houses in the area which have done this in the past without any problems)

2. I have spoken to the financial adviser at the estate agents. Most mortgage companies want the rent to be fixed at 125% of the monthly mortgage payment- very difficult to achieve in this area! (would work out around 600 to 650/pcm). Can i do this, charge a reasonable amount which is less than what the mortgage company wants and make good with my own salary? Is this illegal/ will they find out?

The only other option is to buy the house on a residential mortgage- can i do this then put lodgers in? Is this illegal/ will they find out? I don't:confused: really have any other options, do I?

Thanks in advance
 
Whilst I'm a mortgage broker you haven't come to me for advice and anything I state here maybe incorrect in your circumstances and I'm only providing you with information. You haven't provided me with enough information to advise you on a course of action.

There are currently BTL mortages available with 100% rental yield, this will lower the rental requirements of the lender. The rental vaulation will be based off the rental assesment from the vauler conducted on behalf of the mortgage company. Bank of Ireland and Allianace and Leicester both offer 100% rental cover.

I haven't had to arrange a Buy to Let with additional income to be taken into account but then I mostly work in London. Assuming your putting down a 15-20% deposit why would you want a property where you'd have to contribute towards the mortgage?

In answer to your first question the best course of action is to give the planning office at the local council a quick call they're surprisingly helpful.

Ta
 
Thanks for the reply gideon. I've spoken to a bank/ IFA/ mortgage broker and now getting a mortgage at a decent rate shouldn't really be a problem.

When i placed my last offer of x+2,500 i was told by the estate agent that i should be able to close at x+5,000. They got back to me today (when i called them to chase up if they got a reply) saying my offer of x+2,500 has been rejected and are asking for a raise, since i want this house i offered x+5,000 but told the estate agent this would be my last offer.

I think the estate agent knows i want the house but i'm not willing to pay over the odds for it. The house next door to it sold for x+10,000 around this time last year (when house prices were stable etc.. also the house i'm offering on is in poor condition compared to next door, needs a lot of work)

Although the house has had a bit of interest i'm almost certain no-one will be offering more than what ive offered. One of the senior negotiators was really transparent with me telling me what other offers had been placed and what he felt he could close the deal at but the woman who i spoke to today was really unhelpful and i got the feeling she was trying to play me cold to see how far i'm willing to go. when i called asking to speak to the man i was told he wasn't at work till sat and she wouldn't give me a mobile no. neither. Are all estate agents like this?

Is there anything i can say/do to help close the deal other than offer more. Any advice appreciated.
 
This is a business investment you want to buy low and sell high. If you don't get this property they'll be lots more on the market in 3-6 months. The key to comerical property is not to get emotional involved, you won't live there, all you should be worried about it is will I get enough rent to cover the mortgage, and in the long term will my investment grow, ie is the property likely to go up in value.

Theres lots you could do but its up to you how much of a ******* you want to be about the deal. Just remember the estate agent works for the seller not the purchaser, and his income is likely linked to the sale price. If the estate agent thinks he can get more money out of you he's likely to try afterall thats his job.
 
I have to question why you are willing to pay £5k over the valuation fee given that properties prices are supposed to be falling!
 
x is not the valuation fee

x+ 15k is valuation fee

this is no longer a commercial investment, we will be moving there and putting tenants in our previous house, allows me to get a better rate on the mortgage.

"Theres lots you could do but its up to you how much of a ******* you want to be about the deal." What does this involve?
 
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why are sellers asking/telling you how much to pay? you should put in an offer for how much you think its worth, if its rejected then its up to you and solictor to negociate (sp?) the rest- well thats how i thought it worked but i aint that clued up with the english system, altho it appearing to becoming a lot like the Scots by the sound of it.

and you would need to apply for planning permission for the garage and pay the costs yourself to have the curb lowered.
 
1mm3 said:
1. Am i allowed to seal off the back yard from the rest of the property, create a garage with access from the side to park a car in? (currently only access from back with door/gate no car access, there are numerous other houses in the area which have done this in the past without any problems)
Click to expand...

You'd need to clear it with the council, you may also have to have kerbs lowered (at your cost) and if it's council owned path or ground between your land and the road you'll probably told no.
 
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