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Mortgage advice when buying neighbouring property

(7 Posts)
PhilResch Mon 20-Feb-17 20:58:06


We live in the upstairs unit of a semi detached house that's split into two units. We have the opportunity to purchase the downstairs and combine them into a single property.

We have planning permission in the works, and have a tentative agreement with the seller downstairs (pending permission). However, not sure how to go about the mortgage.

We have a smallish mortgage on the upstairs which is larger and more expensive than the downstairs unit. So ideally what we'd like to do is release some equity from the upstairs into the downstairs so the aggregate LTV is not high.

Speaking to our existing high street bank with whom we have our current mortgage (who've refused to service our request), our best bet is to refinance the entire house with a new mortgage and just do an early payment on our existing upstairs mortgage (the prepayment fees are not prohibitive).

Any suggestions about the right way to go about this? Would hiring a broker be the right thing to do?

PS - The reason our current bank gave us for refusing is 'that's just something we don't do'. Would appreciate any thoughts.

Thank you.

senua Mon 20-Feb-17 21:03:05

Who owns the freehold?

EssentialHummus Mon 20-Feb-17 21:03:41

You need a whole of market broker. There are a few specialist lenders who particularly do stuff like this, but it'll be cheaper for you to use a normal high street lender who is comfortable with this kind of thing.

PhilResch Mon 20-Feb-17 21:23:33

Hi there, each of the two units have a share of the freehold.

What's the best way to go about finding a broker? Thank you.

senua Mon 20-Feb-17 21:46:09

Try asking your conveyancer/solicitor if they know anyone who specialises in this sort of financing?

JoJoSM2 Mon 20-Feb-17 22:01:15

A bit off topic - does it make financial sense? Usually 2 flats cost more than a house + you'd need to spend a lot to convert it back into a single dwelling. Wouldn't it just be easier to sell your flat and buy a house?

PhilResch Mon 20-Feb-17 22:10:01

Hi there, Yes good point. Yes, I think it would. Where we live in west London full houses seem to command a premium over flats as the area is very popular with families.

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