Hi,
I'm trying to purchase a house that has a restrictive covenant on it that mortgage companies really do not like. Technically it will make it harder to sell the house if I was to default or want to sell, but this covenant expires for good in 7 years time. The value of the house is already reduced because of this maybe by 30k - my view is that if I hold out the 7 years then value should increase accordingly!
Now, of the few lenders willing to lend on this, I've been offered 3.6% 2 year fixed. This is obviously about 1.8% higher than market standard - which is bad... The house is 435k, so that would be about £1238/month with ~45% deposit.
At 1.7% standard, it would be about £1010/month. So over say the 7 year covenant life that's near enough a 20k premium on interest alone.
Do I a) run away or b) ask for a 15-20k reduction on the offer, I guess I would still be worse off at high rates, but it would help?
Thanks - we really love this house otherwise, but it's working out if this is worth it or not.