How to get a mortgage?

[Kidds]

Father has a parcel of land, gains planning for dwelling, child and partner build house on that land using mostly fathers cash.
Father says you can have 3 acres including the house but I can't afford to give it you for nothing, I need £120k
(independently valued at £360k)
Child and partner set about finding a mortgage for this property yet are knocked back repeatedly. Earnings are OK, none have said they have an issue with that.
Not married, only got electric heating, shared access and various other reasons given for refusal. No two lenders have used the same excuse and none make any sense, plenty of unmarried couples have mortgages, my own first house was solely electric heating and had a mortgage, plenty of houses have shared access (and if it really was a problem a new access could be made).

My own opinion is they don't like the buying at such a discounted rate but none have actually said so, probably to do with money laundering rules somewhere and probably so much easier to tick the simple applications instead.

So, one of you guys must have done something similar, how did you do it?

 

[Clive]

dont they have to give a reason for rejection legally ?

Have you checked your credit scores etc recently ? lot of failed applications might be hurting them

 

[happycows]

Did exactly this with almost identical figures through Natwest in 2009 although I was very involved at put some money in at building stage. When my mum died at 50 it was her wish I’d own my own home but nothing in writing or will. Just all went too dad. He followed through with her wishes and was fairly simple exercise as far as bank was concerned.
We are hoping too have a crack at some more land from dad and I’ve been Pre-warned at his asking price of 50% of market value it should be straight forward.
Banking has definitely changed since 2009 though and finding someone too fight your corner is not that easy unless you have mega big business. The more 0000000’s seems too focus there mind.
Perseverance is probably the only way.

 

[Kiwi Pete]

Borrow up to the limit based on earnings, should be easy enough to calculate?
Can always park the extra in a term deposit in the short term (until the mortgage anniversary) and then renegotiate terms

Interest will largely counter interest.

We had to do similar to get the right mortgage for here, most lenders were far more interested in a larger figure than a smaller one.. so I fudged the figures and had my choice.

As Clive said, they are obliged to give their reason in writing not fob you off, well here they are anyway.

 

[How much]

its more likely the legal title that is the issue get your solicitor to check it out and make sure its in order ie land around and including house registered as a title with land registry building planning permission correct , completion certificate done etc
ensure that the access is buy by a formal documented arrangement suitable for a dwelling not a field , the acres of land separated from the rest of the holding and registered to the property as a part of a dwelling with correct planning permission for that not as agg land etc etc.
I should imagine they are just looking on a data base and don't see the house or don't see it as a legal property in some way so are not making an offer.
your solicitors would pick up the finer detail but i would maybe get them involved to try and resolve it

 

[BBC]

Speak to your accountant or ask around for details of a good mortgage consultant.

Just completing arranging a mortgage for a project that when we enquired of our current providers, they said no. But when we spoke to our accountant he suggested a consultant who basically said that should be no problem, and has come back with various suggestions at a lower rate than we had planned on, so well worth his fee.

 

[renewablejohn]

Buy the land direct from your dad at mortgage rates unless he requires the full 120 back in a lump sum. You will need to be careful of the money lending rules but a peppercorn purchase price and long term rental agreement would normally fit the bill. Good accountant or lawyer would easily sort but not as easy as it used to be.

 

[Daniel Larn]

Father has a parcel of land, gains planning for dwelling, child and partner build house on that land using mostly fathers cash.
Father says you can have 3 acres including the house but I can't afford to give it you for nothing, I need £120k
(independently valued at £360k)
Child and partner set about finding a mortgage for this property yet are knocked back repeatedly. Earnings are OK, none have said they have an issue with that.
Not married, only got electric heating, shared access and various other reasons given for refusal. No two lenders have used the same excuse and none make any sense, plenty of unmarried couples have mortgages, my own first house was solely electric heating and had a mortgage, plenty of houses have shared access (and if it really was a problem a new access could be made).

My own opinion is they don't like the buying at such a discounted rate but none have actually said so, probably to do with money laundering rules somewhere and probably so much easier to tick the simple applications instead.

So, one of you guys must have done something similar, how did you do it?

Sounds strange, none of those reasons given should constitute an outright refusal. If you'd like I could raise it with our finance partners and see if they can find something for your friend. PM me if you like and we can have a quick chat.

 

[unlacedgecko]

Father has a parcel of land, gains planning for dwelling, child and partner build house on that land using mostly fathers cash.
Father says you can have 3 acres including the house but I can't afford to give it you for nothing, I need £120k
(independently valued at £360k)
Child and partner set about finding a mortgage for this property yet are knocked back repeatedly. Earnings are OK, none have said they have an issue with that.
Not married, only got electric heating, shared access and various other reasons given for refusal. No two lenders have used the same excuse and none make any sense, plenty of unmarried couples have mortgages, my own first house was solely electric heating and had a mortgage, plenty of houses have shared access (and if it really was a problem a new access could be made).

My own opinion is they don't like the buying at such a discounted rate but none have actually said so, probably to do with money laundering rules somewhere and probably so much easier to tick the simple applications instead.

So, one of you guys must have done something similar, how did you do it?

Speak to Ian Summers.
https://www.summersfs.co.uk/

He's done mortgages for me and my family for the past 10 years. IMO you won't find better.

 

[Clive]

is the tax man ok re selling asset to family at less than market value ? I thought this kind of thing was very much frowned up by HMRC ?

 

[Daniel Larn]

is the tax man ok re selling asset to family at less than market value ? I thought this kind of thing was very much frowned up by HMRC ?

There's no problem so long as you are ACTUALLY selling it, and everyone pays taxes on transactions as per the rules. there is no law that states anything has to be sold for a particular value.

 

[Grain Buyer]

2 mile private country lane to my house and a couple of others. One of the mortgage companies had mine down as “shared access”. Idiots.

 

[kiwi pom]

Father has a parcel of land, gains planning for dwelling, child and partner build house on that land using mostly fathers cash.
Father says you can have 3 acres including the house but I can't afford to give it you for nothing, I need £120k
(independently valued at £360k)
Child and partner set about finding a mortgage for this property yet are knocked back repeatedly. Earnings are OK, none have said they have an issue with that.
Not married, only got electric heating, shared access and various other reasons given for refusal. No two lenders have used the same excuse and none make any sense, plenty of unmarried couples have mortgages, my own first house was solely electric heating and had a mortgage, plenty of houses have shared access (and if it really was a problem a new access could be made).

My own opinion is they don't like the buying at such a discounted rate but none have actually said so, probably to do with money laundering rules somewhere and probably so much easier to tick the simple applications instead.

So, one of you guys must have done something similar, how did you do it?

Is it a case of 'it sounds dodgy, I don't want to get in trouble for it, so it' so it goes in the too hard pile?
Who sells something for a third of its value?

 

[Kidds]

Is it a case of 'it sounds dodgy, I don't want to get in trouble for it, so it' so it goes in the too hard pile?
Who sells something for a third of its value?

I think that is exactly what it is but how to move it on?
As said above, multiple refusals must be taking a toll somewhere.

 

[Still Farming]

You say knock backs but not by whom ?
Bank ,Building Societies or what ?
Also if sold at a "knocked down" price The Capital Gains and Tax office will be sniffing ?

 

[Daniel Larn]

You say knock backs but not by whom ?
Bank ,Building Societies or what ?
Also if sold at a "knocked down" price The Capital Gains and Tax office will be sniffing ?

The issue with selling at a knock down price is that whatever is knocked off should really be considered as a gift.

There are potential tax implications here, but it's all going to be relatively minor. It isn't going to cost them more than the 240k they've saved, so they are still going to be quids in.

 

[Still Farming]

The issue with selling at a knock down price is that whatever is knocked off should really be considered as a gift.

There are potential tax implications here, but it's all going to be relatively minor. It isn't going to cost them more than the 240k they've saved, so they are still going to be quids in.

Hope so but be prepared .

 

[Little squeak]

I need £120k
(independently valued at £360k)

the figure HMRC will take when compiling the vendors CGT liability will be £360k no matter what price the land is sold for, is the vendor aware of this?

 

[Daniel Larn]

Hope so but be prepared .

Definitely, and don't just take my advice. Definitely worth getting a good solicitor for the seller and the buyer, just to make sure it's all kosher.

You could look at gifting the house, and then getting a mortgage for the partial value. That may be more tax efficient. As the child and partner are not married, you could get prenuptial agreement set up to exclude the property. That way you get the best possible arrangement financially, it's tax efficient and it avoids the common pitfalls of gifting property.

...but definitely seek professional advice if you're doing anything complicated like that.

 

[Kidds]

the figure HMRC will take when compiling the vendors CGT liability will be £360k no matter what price the land is sold for, is the vendor aware of this?

I don't know so shall mention it. I suspect you are correct.