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Mortgage for two flats on one deed, a possibility?

7 replies

chocolaterainbow · 17/09/2014 14:51

Sorry if this is a bit long, to summarise we're looking for a mortgage company that would lend for two flats (to be converted into one house) on one mortgage as they are being sold together as one lot at auction.

So.. We're first time buyers and have viewed a lovely house this week that's by no means perfect, it's in need of a bit lot of renovation and is currently two flats. But it's so lovely, had so much potential and in a location that I'm really keen on. It was originally one house so the conversion back to house would consist of ripping out one kitchen and knocking out a bit of plaster board. But the big question is - would we be able to get one mortgage for both properties? To further complicate matters the house is up for auction but the estate agent suggested the seller may take reasonable offers and withdraw from auction, but as it's being sold by the local council I think it's probably going to go to auction regardless of a decent offer because of their need for transparency etc. If it goes to auction I'm fairy confident that we could get it for a decent price, but we would ideally pay no more than £15-20k more than the guide price (75k) as I think that's a realistic value of the house in it's current state. We can afford a 15-20% deposit dependent on the price. We'd then able to borrow up to £25k from family for the immediate renovation costs.

Another possibility that I'm not really sure about due to the risks involved is that we borrow a huge amount of money from relatives (none can afford to lose it, but can lend it to us very short term) and pay for the house outright at auction with that, then change the deed/knock through etc and get a mortgage. We'd get a survey done before buying with cash to make sure we'd get a mortgage for the property, and get all our paperwork in order. But I feel like this a stupid idea that is bound to get over complicated and with the possibility of lots of stress for us and family members that would lend us the money.

OP posts:
chocolaterainbow · 17/09/2014 14:52

Feel free to tell me to forget about the second idea!

OP posts:
thatstoast · 17/09/2014 15:00

Yes, ignoring the second idea, I would speak to a broker. I initially assumed this was going to be a buy to let investment which would makes things a bit easier. I'm not sure it's even possible for residential mortgages but a broker would be able to point you in the right direction.

Ellawilk · 17/09/2014 15:05

You have to be careful because mortgaging the property within 6 months of buying it is treated as suspicious because of money laundering. If you can explain why family cash bought it before and the valuation is what you paid for it, you can get around it. Just something to bare in mind.

financialwizard · 17/09/2014 15:08

Some lenders will consider a 'day one' remortgage. Virgin for example if you bought it and did it up cash.

chocolaterainbow · 17/09/2014 15:19

Thanks for replying. I'd kind of written off brokers after we saw a terrible one once but surely there must be good ones about too. Do you know of any decent nationwide ones as we live quite rurally and there won't be one in our two nearest towns.

OP posts:
chocolaterainbow · 17/09/2014 15:22

Oh, haha we're definitely not in the business of money laundering!

OP posts:
VestaCurry · 18/09/2014 03:52

London & Country are recommended on the MoneySavingExpert website.

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