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The Banks press Pause

mike2016

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Disappointing week. I've been waiting three months on a decision by the bank about splitting the property folio and allowing me to sell the old house but keep the side garden to build on. They are concerned if I don't sell the house they are taking a risk as the LTV would then exceeds the Central Bank limits. The reduced property value post split plus the fact I've only a year paid down on the mortgage plays into this. I thought they would hold the side garden as security but it doesn't work like that....

I've been talking to a few banks and my solicitor about options but the clearest to date is either to split the property at time of sale or wait a year, pay down the mortgage to get it below the 80% LTV threshold (depending on the valuation), then in a year ask the same question. 

I'm all ready to go to tender - have builders lined up and the tender package written but without the bank's approval I can't proceed. 

I'll wait to see if any other options emerge but getting access to the garden has been an issue from the start. I tried to buy directly off the previous owner but the banks didn't play ball, and now again I'm hitting institutions that we bailed out calling ME a risk! Anyway, rant over. Turns out nothing is simple. I can only ask the questions, the replies sometimes confound me! 

Let's see where we are in 12 months......

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Are you going to lose a lot selling the house without some of the garden, we did this, took more than half of the ground that was with the house but still left a reasonable amount and we only lost 5k , have you checked out the value of what you want to sell?

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Got valuations done of side garden with planning, the house without the garden and the value of the proposed new house when it's finished. The main problem is I can only access 80% of the build cost / house value (whichever is the lower) with a new mortgage and I've no savings to speak of so rather tight to pursue a build at present. Give it a year and I'll have paid off the mortgage one more year and added a lump sum to that to reduce it further. 

I can split the folio at time of sale despite absent advice from one solicitor. So that's a runner.

I've now gone out to tender and hope to have up to 6 builders quotes in by Xmas to consider. Currently though my finances aren't in a good place so am planning on switching banks to get a 1 year fixed rate and 2% cash back while deciding if I should sell and build and if that's possible in January or delay a year. I can always break the fixed rate early if necessary.

So, let's wait and see! Maybe Santa will be nice to me! 

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