Question re borrowing and equity

[sweetkitty]

Just looking for some advice really. We have planning permission and building warrants for a 2 storey extension which is desperately needed. We were planning to start it March next year.

The thing is in order to fund it we were going to use the proceeds from a house sale (DH and SIL both jointly own MILs house), the house has been on the market 3 months now with one viewer, DH and I want to slash the price in order to sell it, SIL does not and think the market will pick up next year. I think the EA over valued the property and given that there are another 2 in the same street up for sale the chances are it's not going to sell anytime soon.

We don't have enough equity on this house to finance the build so have to wait until MILs house sells.

I am so desperate to get some more space in this house and get the extension started, at the moment we have DS in with us and it is so squashed. DD1 and 2 share a small room and DD3 has a tiny box room.

The thing is, is there anyway we could use DHs half of the house in order to raise the finance to start the build? Or do you need to own the property outright?

I know it sounds really bad that we are just money grabbing and wanting to sell MILs house at any cost and deprice SIL of money but MIL has been dead just under 18 months and her house has been sitting unoccupied with us trying to maintain it and pay insurance etc on it, it just feels like it is hanging over us.

SIL would have to agree go onto the mortgage with DH, then the lender would do credit checks etc and take into account both DH and SIL's debt etc, if they felt that was ok they may lend the amount that you are after. It would depend if the lender would be prepared to do it on an interest only basis (the cheapest per month).

Depends how your DH and SIL feel about money, it could be costly too though as you'd have admin fees etc to pay, and the monthly instalments...(all that cash that could be spent on nice new things for the extension!?!).

Did they get 3 valuations to get a proper idea of the value? If it's sitting empty could you 'volunteer' to do a bit of tidying up (like you probably have time with 3 DC's) and spruce the place up a bit so that it appeals a bit more?

Sounds far too complicated would never want to involve SIL like that.

To be fair SIL has done a kit of sprucing up, she us on her own with one 17 yr old at home and lives 2 mins from MILs house, we live an hrs drive away and have 4 hound DC including a baby.

That's another thing as to why we want to sell it SIL is always moaning about having to cut the grass etc on her day off.

I think you need to talk to SIL and get the house sold. House prices are not rising and will not rise significantly in the next few years. Some people are arguing that prices will fall but no-one is expecting a rise. All the time it is unsold it is costing you and SIL money because you're losing interest on the proceeds and you need to keep it maintained. The longer a house is empty the harder it is to sell.

I wouldn't suggest borrowing against it, even if you were legally able to, as you don't have full control over selling it.

I was just clutching at straws, I am just so desperate to get this extension started.

Talk to SIL well that's a difficult one, she doesn't answer her phone, the only way is to e-mail her and then you might only get a response maybe a week or two later, it is so frustrating. She said the lock on the door needed fixed about 3 months later it still wasn't done, DH offered to take a day off work and go down and get it sorted, he had to phone round get a locksmith then arrange for her to be in for an hour whilst he came round (she works at home 1 or 2 days a week and lives literally round the corner).

I think to keep it simple the EA valued it at 105K, the home report said 100K, DH wanted to put it on the market for 95K, SIL said no we should go with the EA so it went on at 100K, 3 months later 1 viewer, DH keeps e-mailing her about dropping the price even EA said so, DH wants to go to 90K, but says split the difference and go for 95K I think she has very reluctantly agreed now.

The other houses for sale look more modern and MILs probably needs a new kitchen and bathroom so SIL was saying well we could get that done which in my mind is barking to spend money and time getting it done to maybe get 100K all the time house prices are falling and if it takes her 3 months to get a lock fixed how long to get a kitchen fitted?

DH and I just want the house sold, the money in the bank and to draw a line under it all.

Have a chat with your solicitor, the usual rule is that when a property is jointly owned and one owner wants to sell it must be sold.

Try pointing out to SIL it is costing you all money, I assume as it hasn't sold in 6 months you will be paying council tax again, insurance (which won't be at the same level as when MIL was alive as house is empty), also if we have a winter like last year, what about frozen pipes etc?. I am also in Scotland and my Mum died earlier this year and I am only one local and I was glad when we sold as I used to worry about the house lying empty.

SIL does want to sell (I think) but is just dragging her heels about this price thing. There's no way in this climate it will achieve the EA valuation.

I agree with everything re the maintenance/insurance etc and as seb has said just the house lying empty, there is no point in having a house lying empty no good to anyone.

SIL is a typical ostrich she puts her head in the sand about anything that is too much stress and hassle.

Think you are right, definitely agree, barking to put in a new bathroom and kitchen just to sell it, no guarantee you'll get a higher price.

Is hard living when it is a squash though. Perhaps SIL is feeling sentimental and could buy DH's half and live there herself [hgrin]

Absolutely crazy to put in a new kitchen and bathroom in a house that (presumably) is looking a bit dated. If your best bet is to sell it to a developer or fixer-upper which is what it sounds like then you need to price aggressively. Get some more quotes and agree a plan for it not selling. You are going to have to plan a day in advance with her to do this by the sounds of things but I think the only thing you can do is take control of things.

I REALLY wish she would buy DHs half, it's not about the money as such, he would probably sell it to her well below the current valuation. I don't think she would though as her 17yo daughter wouldn't live in it (whole other thread here but 17yo daughter basically calls the shots, crazy I know).

The house is a semi and the house next door is for sale 5K higher but it is a lot more modern. SIL said that maybe someone would buy them both and covert them to a 4 bed house, this is where her head is at, so someone would buy 2 semi detached houses for sale 100K each, spend what 40K maybe converting them and then have a 4 bed house worth 160K??!!

As somebody who sold my grans house for £34k in 1998 just before it became worth £125k more or less over night i would say rent the house out and use the income from the rental to cover the loan payments to get your house extended.
You can only imagine how many times we've kicked ourselves over that fisaco.

Can you not rent MIL's house out? We bought a property recently and for the mortgage they took into account income from a rental property we have. Its not a great time to sell at th emoment so it may be worth considering?

mamatomany - I don't think that would happen up here in this climate now, we don't have the really overinflated prices in the SE.

I really don't think renting is a option really although I think SIL wants to do it. There's a load of properties to rent in the area so it would probably be DSS which I am a bit about, then you still have the maintenance/insurance and buy the time you appoint an agent and spilt the remaining rental with SIL there wouldn't really be a lot left.

I also think SIL is going to find it hard someone else living in MILs house anyway but if they wrecked it etc I think that would be tough for her.

Mamatomany - those days are over and prices are not going to rise again like that. It was a mad, mad time.

Renting out is a lot of hassle and can be very expensive so I'd say to the OP that your best bet is if you SIL comes to some sense and prices the house correctly.

EVERYTHING will sell if it's priced correctly. Holding on to it is just throwing money away (and not good to leave a house empty for so long) Perhaps send a link to your SIL www.housepricecrash.co.uk or the MoneySavingExpert website who also discuss falling house prices. (Infact just get her to read all the newspapers..it's all doom and gloom just now ..mortgage approvals fell by their largest ever amount last month so there is only one way for prices to go)

Try www.propertysnake.co.uk to see how properties are selling (or not) in the area. Also I know selling the family home is hard, our's had been Mum and Dad's for over 40 years, when it was gone I found it slightly easier (hell on bloody earth selling and emptying it) and we only had it on the market for 10 days, but I kind of got some closure when it was over. Having said that I haven't been past the house since . It may help your SIL with moving on.