A derelict house, a flat with a short lease, a house without a bathroom and a subsiding bungalow. Do you know what they all have in common? They are all unmortgageable properties.
An unmortgageable property is one that a mortgage company refuses to lend on. There are various situations in which this can be the case including:
● Derelict properties
● Properties with short leases (generally under 70 years)
● Properties with no bathroom or kitchen
● Properties with structural defects, damp, dry or wet rot or subsidence
● Properties with recent flooding, sited near a landfill or close to mining works
● Properties with boundary disputes or that have had unauthorised building work
● Buildings of non-standard construction
● Low value properties (generally under £50,000)
● Properties with sitting tenants
Why won’t companies lend for these types of properties?
Mortgage companies see these types of properties as too much of a risk for them to lend on. For them to lend they need to be sure that if they had to repossess the property because you couldn’t pay the mortgage then property would easily sell so they can claim their investment back. These types of properties may also decrease in value over time. This worries a mortgage company as it means they may not be able to get the amount they lent back when sold.
What if I want to buy or sell an unmortgageable property?
Buying or selling unmortgageable properties can cause some problems.
If you are interested in buying an unmortgageable property then you must be a cash buyer or able to get finance from somewhere other than a mortgage company.
If you are looking to sell an unmortgageable property you will have a greatly limited pool of potential buyers. As getting a mortgage is not an option only buyers who are able to pay cash for your property will be able to buy it. This can mean you may have to be patient to find a buyer. You may also find that you won’t get market value for your property if there is a lot of money that needs spending on it.
Got an unmortgageable property and struggling to sell it or want to get rid of it quickly? If so, call Reader’s Digest Property. We have teamed up with respected cash property buying company House Buy Fast. They buy any property in any condition for cash. Call now on 0800 4337979 or fill out the form below.