Ori­ent ex­press ad­vice – from Asia to liv­ing in a rail­way car­riage

Yorkshire Post - Property - - PROPERTY - Brian New­ton

Q: Do you know of any spe­cial­ist com­pa­nies that are able to pro­vide or as­sist in the pro­vi­sion of a mort­gage for the pur­chase of prop­erty in Asia? A: In my ex­pe­ri­ence, I have not found any spe­cific mort­gage lenders that will help with ar­rang­ing mortgages in this re­gion. Cer­tainly, the main­stream lenders that I have spo­ken to would not look at prop­er­ties in Asia un­der nor­mal rules.

How­ever, both Lloyds TSB and HSBC have strong con­nec­tions with the Far East. As such, one of their sub­sidiaries or as­so­ci­ates may be well placed to help. Q: My hus­band and I are cur­rently in the process of sell­ing and buy­ing houses, with prices hav­ing been agreed through­out the chain, com­ple­tion dates still to be agreed. We have just learnt that our buyer is hav­ing dif­fi­culty get­ting a mort­gage for our house be­cause the house has had move­ment in the last two years. Cracks in the walls have been re­vealed and have turned out to be old move­ment caused by ex­ter­nal leak­ing drain pipes. The drains have been re­paired by our in­sur­ance com­pany and the sub­se­quent pe­riod of mon­i­tor­ing has been com­pleted sat­is­fac­to­rily, with the loss ad­jus­tors ac­quit­ting the house of fur­ther move­ment. Can you name any mort­gage lenders who would not refuse mortgages on th­ese grounds, with or without writ­ten con­fir­ma­tion from the loss ad­jus­tors? A: The gen­eral rule is that all mort­gage lenders will lend, sub­ject to their val­uers’ com­ments. Ideally, you should ob­tain a full struc­tural sur­vey on the prop­erty, which will demon­strate the true con­di­tion of the build­ing. The prob­lem here, how­ever, is that a sub­se­quent buyer might feel that this re­port was bi­ased in your favour, rather than prop­erly in­de­pen­dent. As such, I’d sug­gest that you per­haps of­fer to con­trib­ute to the buyer’s own sur­vey in­stead. An­other is­sue to con­sider is that any buyer will need to take out build­ings in­sur­ance. Bear­ing in mind the re­cent his­tory of the prop­erty, you will need to find out whether the prop­erty is in­sur­able against struc­tural prob­lems, as this could oth­er­wise dis­cour­age your buyer. Q: Our ex­ist­ing fixed-rate mort­gage stops in Septem­ber. We want to re­mort­gage only over 10 years. Are there lenders who will al­low us to do this? Our house roughly is worth £180,000 and we may want a mort­gage of £160,000. I have a good salary of £75,000. My wife has some earn­ings from a part-time job. We are tak­ing a lit­tle more than what we owe to con­sol­i­date some loans. A: Most lenders will hap­pily lend to bor­row­ers over a shorter term such as 10 years. How­ever, if you are tak­ing out an in­ter­est-only mort­gage, they will look for some sort of ve­hi­cle to en­able re­pay­ment of the cap­i­tal when the loan ex­pires.

The loan to val­u­a­tion ra­tio that you are aim­ing for is un­der 90 per cent, and most lenders will ac­cept this fig­ure as an up­per limit for what they re­fer to as debt con­sol­i­da­tion. But, please be aware that many lenders will not of­fer their most com­pet­i­tive prod­ucts over a shorter term, and that some smaller build­ing so­ci­eties may not ac­cept debt con­sol­i­da­tion at 90 per cent LTV. Q: I want to buy and ren­o­vate an old train car­riage to live, and pos­si­bly work in. I don’t know of any­one who has done this, and if it would be pos­si­ble to get any fund­ing or mortgages from any­one, as I re­alise it does seem like a bit of a mad ven­ture. Any fi­nan­cial ad­vice would be much ap­pre­ci­ated. A: The ba­sic rule is that a prop­erty is deemed suit­able to mort­gage by the lender’s val­uer, and not the lender. As such, you would need to per­suade a val­uer or sur­veyor that the train car­riage forms ad­e­quate se­cu­rity for a bank or build­ing so­ci­ety to lend money on.

Fun­da­men­tally, the val­uer needs to be con­vinced that, if you were to de­fault on your re­pay­ment obli­ga­tions un­der the loan, the lender would be able to re­pos­sess, and sell the prop­erty or as­set to re­alise suf­fi­cient funds to dis­charge the out­stand­ing debt. Be­cause the value of a rail­way car­riage in it­self will surely de­pre­ci­ate over time, rather like a car, I very much doubt that any lender will agree to it form­ing any part of their se­cu­rity for a loan.

How­ever, if you are also in­tend­ing buy­ing the land on which the car­riage is stand­ing, some lenders will agree to the grant­ing of a se­cured loan or mort­gage on the plot alone.

Al­ter­na­tively, or in com­bi­na­tion with a se­cured loan on the land, you may be able to ob­tain an un­se­cured loan of up to £25,000 on the car­riage.

Brian New­ton runs Bluesky Fi­nan­cial So­lu­tions, Leeds, tel: 0113 294 6222.

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