mortgage on damaged house

onthestreet

I am buying a georgian property which has had a problem with the basement flooding, but its not in a flood zone. Also, a wall beside the stairs on the inside of the property has sunk, which means I will need a new set of stairs. Does anyone know if the bank underwiters are likely to consider this as habitable and suitable for a mortage?

MarkAnthony

Unlikely I'd imagine. I suppose it depends what LTV you're looking for. Have you checked the property is insurable?

onthestreet

The property is insurable as its not in a flood or subsidence area. Just to explain the wall sunk when the house settled 200 years ago and has not moved since. Its not leaning either. So the staircase can just be straightened. What issue do you think the underwriters will take exception to?

The_Conductor

The issue is the amount of work that would be necessary to bring the building up to code- and the simple fact that you're almost guaranteed that its a listed building (which will massively complicate any remedial work you do).

Totally aside from the issue with whether, or not, its a mortgageable property- the whole issue with rehabilitating the building can be a nightmare.

My brother recently bought and renovated one- and it reached the stage that even the roof had to be reinstated- none of the windows were salvageable- so he had to get a joinery company to make identical windows, the walls internally were falling in from the property next door- and akin to your issue- the basement was flooded.

The amount of work in a situation like this- is staggering.

Getting a couple of rooms habitable- and fixing the major issues- could take 6-9 months- thereafter you'd have to fix the other issues- including the flooded basement- over time (or when finances allowed).

Get someone who is familiar with Georgian buildings and what restoring them entails- to do a report for you. Even if the report costs you a couple of hundred Euro- it could be the best spent money you'll ever spend.

onthestreet

Hi "Conductor". The house is probably not in as bad condition as your brothers. The main house is in good condition. The main issue with the mortgage underwriters is since the stairs are unstable, do they consider the house habitable? Also, how do they view a basement that is still flood damaged?

The_Conductor

The house doesn't have to be 'habitable' to draw a mortgage down on it. Once the LTV ratios are in order- and you have your deposit in order- the bank are insulated from any falls in value etc.

What is the nature of the flooding? If its a simple burst water pipe- easily remedied, sewage or seepage- not as easily remedied (and may involve quite a bit of digging work (I've seen the whole underside of steps going up to front door have to be removed (including in my brother's case)).

Wiring- and plumbing- insofar as they exist- will probably have to be redone from scratch- if you're doing this- use the opportunity to run CAT boxes to all rooms- its worth having a communication's hub in any modern house these days.

Talk to the mortgage advisor and get their opinion, off the record, about what they are liable to say/do- but also get someone who knows how to resolve these issues evaluate the situation- don't assume its anything- get a professional opinion.

riclad

FIND out is it a listed building,
i know ordinary houses ,200 plus years old , 3bed terrace house,s ,they are not listed .Having work done on a listed building ,can be more expensive,
as certain materials are needed that blend in with other buildings ,
eg georgian style windows ,etc
An ordinary standard structural mortgage costs a few hundred euros .
a survey will give you a rough estimate of the costs ,repairs needed .

garhjw

riclad wrote: »

FIND out is it a listed building,
i know ordinary houses ,200 plus years old , 3bed terrace house,s ,they are not listed .Having work done on a listed building ,can be more expensive,
as certain materials are needed that blend in with other buildings ,
eg georgian style windows ,etc
An ordinary standard structural mortgage costs a few hundred euros .
a survey will give you a rough estimate of the costs ,repairs needed .

OP, I think riclad covers it. Real issue here is if the building is listed and the potential cost of rectifying structural problems. Dealing with the conservation police is a nightmare.

onthestreet

Hi, yes its a listed building so I'm getting the impression from you all that the repairs will be expensive. The issue with the flooding as far as I understand it was from water coming in from the street in the rains of August last year, but its hard to say, anyway, that water would have mixed with the sewer in the basement. "The Conductor", in terms of the LTV, the valuer has said the house is worth what I am paying in its current condition, but will the potential repairs affect the LTV anyway? Im hoping for around 85%.

The_Conductor

Its not that the potential repairs will affect the LTV of the property (if anything they will improve it)- its that the repairs could be expensive- and you're going to have to figure how to fund them (your mortgage will not cover repairs- and presumably you don't have a second lumpsum set aside of your own funds to fund the repairs?

Before you do anything at all- have a surveyor with experience in Georgian houses, check out the damage and do you a detailed report. It may be a lot more minor than we have been suggesting (above)- but it may not be- its an unknown.

Also- the fact that its a listed building- given the nature of the damage- shouldn't impact the repairs. Essentially you'd be removing things- rehabilitating them, and putting them back again.

Before you go any further- have a surveyor examine the damage and do up costings for the remedial work.