using Site as indemnity for a Mortgage?

xern

Hope this is in the right place.
My parents are giving me a site in the new year so i will be applying for planning permission on this site. the only problem is i live and work 150 miles from home. I am fed up renting and want to have a place of my own.
It will probably take me 2 More years to save enough for a deposit so I was wondering does anyone know if you can use the deeds of a site as security against a mortgage?

Any info would be great.

Pataman

generally yes, if you can prove, local estate agent, that the site is worth equal to or more than mortgage.

Victor

xern wrote:

the only problem is i live and work 150 miles from home.

There may be planning permission and travel issues involved in this.

xern

Ok maybe I wasn't clear there.

I live and work in Dublin, I'm from the west of ireland, there isn't much work in the west for me and i'm not to interested in moving back in the next fue years.

I want to buy my own place in Dublin or surrounding areas,, fed up renting, I don't have a full deposit, have enough for a booking deposit. I don't want to sell the site i have at home. Could I use my property in the west as security for the rest of the deposit with the mortgage lender???

Hope this makes sence.

Victor

You might be able to use it as collateral yes, although there may have to be a separate mortgage on it, i.e. you get mortgage on site and then use that as deposit on house, if you know what I mean.

You will have to have the site in your name with no attachments to it. Best talk to a solicitor, accountant or mortgage broker.

xern

Oh right sounds fair enough.
must get on to a financial adviser.

Cheers

antoinolachtnai

You can try this, but I don't think the bank/building society is going to be too keen on the idea. The site is only worth a couple of grand without planning permission. Anyway, the bank likes to see some cash.

If your family has a good relationship with a bank down the West, then go to them and talk to them about it. The manager down there will be more comfortable with the situation and may appreciate the commission on a mortgage more than the city slickers. (This is an absolutely normal thing to do. I know a lady who seem to have bought about ten houses in Dublin using finance from a bank in Tipperary.)

davidoco

Planning permission in the case you mentioned is usually, but not always, dependent on the person getting it to live in the property for five years as their main residence. Therefore the bank would look at your site (with permission) as only having a value to you to build ie no real resale value save argi value. As you really have no intention of building on it just yet and planning lapses after 5 years(?) you got a catch 22.

If you were to intend to build now and live in it --- when dealing with the banks (I recommend EBS) they will take the value of the site, as a site with planning permission, because they don't pay over a penny until at least the foundations are laid. This way you can build a house with no actual cash in your back pocket. By foundation stage the site will be worth a lot more than 10% of your mortgage, ie that's your deposit. They specifically mention this on their website somewhere.

xern

Thanks for all the advice guys.

Cheers.