How can I borrow £45K ??? (legally and fast!!)

[pinkingshears]

I want to move and have found a fixer-upper which is going to auction at £45K (seller accepting bids prior to auction date of 1st May) This property has a Home Report (I am in Scotland) value of £90K but the HR says that £15K of work needs doing before funds should be released so is not mortgageable at present.

I would therefore need to borrow funds via a different method. This is hard as I am not employed but am a full time carer for my disabled young person. My income is 2K per month (all benefits, some Carer's some UC and some PIP)

My current house has an outstanding mortgage (taken before I stopped work) of £100K, this is due to expire in 2029 and is interest only so I currently pay £192 p/m. I will need to sell then but this place is perfect for 'getting ready' for that.
My house should fetch no less than £275K if sold (identical house opposite sold for £350 last month) which would leave a balance of £175K so plenty of equity. but not enough time to sell before fixer upper auction.

Will I be able to obtain Bridging Funds or is my income too low for affordabiltiy please?

I have just bought a property prior to auction. Firstly you will need a specialist Auction solicitor as the sale goes through very quickly.
Read the legal pack and get builders to have a quick look for anything major. Even if sold before auction the sellers will have a reserve price (usually 10%-20% higher)
Solicitors fees and auction fees need to be added and auction fees need to be paid straight away (as soon as the sale is agreed) You exchange straight after and you cannot pull out without incurring substancial fees. Best of luck if you do go ahead.

45k is the starting point

I think you also need to be realistic about benefits which could be reduced at any time in the future

If you buy the wreck and have 2 houses will you have to pay CGT on selling your original house?
As pp have said, 45k is the start price.

You might be able to get a Disability Improvement Grant to adapt your current home.

It's not going to go for 45k though is it? There will be other people interested.

You are in no position to borrow £45k. No responsible lender will lend
it to you in the circumstances you describe.

And isn't there auction fees as well?

This with bells on.

There really isn't money to be made of refurbs. Let's say someone buys a house for 200k, spends 75k on it. They might be able to sell it for 250k. So making a loss. They would have been better to spend 250k on a refurbished place.
Same principle for you. Work out what you would have paid for wreck + refurb costs then look at the houses available. If they aren't as good as your wreck once refurbished, it means that you have not budgeted enough to refurb the wreck, not that you are getting an amazing deal.

Absolutely crazy! You do know that Rachel Reeves is coming after your PIP and probably benefits too?

What if the 'wreck' has underlying problems like subsidence that could spiral into thousands of pounds of work? Sometimes there is a reason why these buildings are being sold cheaply at auction.

I'd also look at those interest rates on that bridging loan as you don't want to get trapped into even bigger debt.

The reason you can't get affordable credit is that the people making the decision will look at your loan application and see you as too hight a risk.

PPs on this thread are pointing out why upyr plan is a bad idea, and you don't have any answers to their concerns, so you wouldn't be able to answer the banks concerns. If, say, your dad was a builder who would do the refurb well and for materials, and you could live in your parents house while the work was being done, it might be doable, but living in a caravan while the works are done by tradesmen doesn't reduce the risk of non-replayment.

You might be able to get a high interst bridging loan but you are at risk of losing your home if you can't repay, and as you're on benefits, there's a good chance you will fail to repay.

If you think you can make this move work financially, your best bet is to borrow from family, and make a case to them that you can afford to repay.

Funds from selling your home
You must tell us about funds from the sale of your home, even if you intend to use them to buy another home for yourself. We will not take these funds into account for 6 months. This can be extended under special circumstances.
Grants or loans to repair or alter your home
Grants or loans for essential repairs or adaptations to your main home are not taken into account for 6 months. This can be extended if the repairs or alterations will take more than 6 months.
Property you own, but do not live in
Property in your name that you do not live in is taken into account unless it’s the main home of:

• a close relative who is retired or has a severe health condition
• a former partner who is a lone parent

Universal Credit: money, savings and investments - GOV.UK

The 6 months grace period should help you. Given the equity in your current home, your best bet seems to be to see if your current lender will help you. Have you asked them? If they won't, then speak to a specialist broker. I understand some are more geared up to borrowers with disability, caring responsibilities and benefits as income. Best of luck, OP. I can see that you are trying your best to provide a long-term suitable home for yourself and your young person, and are needing to think outside the box.

@TheHillsIsLonelyTHANK YOU, THANK YOU, THANK YOU! Both for the useful info - (my CAB doesn't have an appt available for weeks & Benefits tend to say: 'make the change, advise us, then we will adjust')
AND for grasping that I am in a very limited situation & trying to do my best to improve it.

There is no doubt you are in circumstances that make moving home really difficult for you. You have to balance your mobility needs against caring needs, plus the complication of trying to better your situation within the limitations of social security rules.

I don't think there is a way for you to do this without taking on too much risk. It could be really detrimental to your health and who you care for.

Can you get a house suitable for your needs for the 175k equity you can release from your house sale? I think you need to sell your house and then wait for the next property you like, they will always be another opportunity.

Like others have said there are disability grants available to improve your home to suit your needs. There are even grants available to help you move if your house can't be adapted. This could help you navigate your way to a house more seamlessly.

https://www.citizensadvice.org.uk/scotland/housing/home-repairs-improvements-and-adaptations-s/housing-grants-and-loans-s/

I think if adaptions aren't possible or it is cheaper to move house they will support you do that instead.

Do you also have the £3600 you'll owe in Additional Dwelling Supplement tax (assuming purchase price of £45k)? Yes you'll get it back after you sell your other property, but it is due when you sign missives.

@ThatHazelGuide Thank you for this.
I had someone to see whether I could get insulation for my house (No) and also to see if access can be improved (No) but no one mentioned any assistance to move. I will look into it but everything is cut to the bone in my county now (they have just announced they are closing LIbraries and swimming pools, very few buses now etc - even the CAB is only open a few days a month). Because I 'own' (albeit with a mortgage on interest only) it is harder than if I was in rental.
I don't expect 'hand outs' but I do want to improve my situation as I can only easily access a kitchen, shower and a living (will become bedroom in time). Obviously I do access my (older) kids rooms but it is more & more difficult.

There is only one other thing I can think of. My exH and I Divorced last year. I am now alone on the Title but we are both still on the interest only mortgage.
If it were possible to raise a 2nd charge on the house, HE could buy the fixer upper. Then fix it up. I could then sell my house, he could move out, I could buy it from him. The title could be transferred to our kids (with me having a lifetime right to live there too?) Now I have no doubt that it is unlikely the funds could be raised by a 2nd charge, as although there is equity in the house the income to support increasing the mortgage would be too low. It is also a risk that he would do that & not refuse to move out. But I also need to find out if I would be doing anything wrong by doing that? Obviously I 'd have to ask/declare re any benefits I was getting, I just meant legally. I can't ask at CAB: theyre never open, and I'm pretty stuck at home too. If replying to this post, please be factual. I'm not dishonest, I'm not (very?) stupid but I do feel stuck/ desperate about this.

Have you looked into Equity Release?

I won't ask where you live as clearly you don't want to say, but it's hard to say what's available as devolution has created a postcode lottery - eg. can no longer say what is right in England is right in Scotland.

I hope you can get something sorted 👍 and CAB are helpful.

I'm not sure about buying the new house from your ex and giving it to the children while you live in it. How would you account for not owning a property any more (unless I've misunderstood, head's a bit woolly atm!) ?

Most of the properties I have seen go to auction achieve much higher than guide, so it’s a little unrealistic to think it will go for £45k, it could be £20k more. I think guide is set to stimulate interest.

Sorry OP I appreciate you are desperate but getting into massive debt when you can't repay your loan, and being stuck in a caravan with your mobility issues when you can't afford the house refurbishment, isn't going to do anyone in your family any good.

@ThatHazelGuide Happy to say where I live by pm (not on here as have other threads too). Please pm me IF you wish x

In general, I think the only way would be to release equity from my current house, exH to use it to buy in his name, restore enough to live in, then sell my house. That way no one lives in a caravan (my yp are much older but I am doing this for them, as they have additional needs and will need somewhere secure when I am gone - I am 57 but have lost quite a few people in the last 3 years)
The question is whether this is all possible financially, legal in terms of tax etc. Re benefits of course I'd declare it all (& possibly lose my current UC) but, as others have pointed out, Ms Reeves is coming for all benefits, even PIP.

You have so many variables in this plan you really need to practically go through each step:

If you release equity in your house and buy the run down property in your Ex's name, do you trust him not to waltz off with it once its finished, you have no protection otherwise.

How will you afford the renovation? Who will be doing it? How long will it take?

What will you do if you lose your UC while two houses are owned?

It looks like you are going to need considerably more than £45k, its going to cost more than that just to buy the property as PP's note and thats before renovation, stamp duty, solicitors fees etc. Where is that going to come from?