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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk/
Tel: 0345 345 6788
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Question
Can I take out a mortgage to buy a piece of land?
My family and I live in a small private road which is just off a main road. There are three other residents in our lane and one of them is selling up.
The resident who is selling up owns large a front garden which is quite ‘communal’ and so the remaining neighbours and I are considering clubbing together to buy the piece of land from the current owners so we can use it as a joint area to have BBQs, socialise, let the kids play safely etc (when Covid restrictions are lifted, obviously).
Is this something we could get a mortgage for? Or would we have to add it to our own homes as an addition?
We haven’t negotiated a price yet, at the moment it’s just speculative, but understanding our options in terms of financing the process will massively help our decision.
Answer
First of all, your neighbourhood sounds incredible! There are mortgages available solely for land, but they are really expensive (c7% interest rates).
I would recommend speaking to your existing mortgage lender and asking for a top-up mortgage, as this is likely to be far more cost-effective. Good luck!
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Question
Can I claim some proceeds from the sale?
I recently discovered my ex-boyfriend is selling his flat as I saw it advertised on Rightmove for quite a considerably larger sum than he paid for it five years ago!
We separated over a year ago but I lived with him for three years and contributed towards half his mortgage payments every month. I also contributed towards half the bills – if this is relevant.
My friends think I might be entitled to a proportion of the money from the sale of the property, even though my name was not on the mortgage, because I was contributing towards the payment. Although we had no formal agreement drawn up, I had set up a regular monthly standing order with my bank entitled “Mortgage Payment” so there is evidence of my regular contributions and how much I paid in total.
I am also hoping to get onto the property ladder myself in the next few years. Therefore, can I use this as evidence of being a responsible borrower?
Thanks for your help!
Answer
Unfortunately, whether or not you can claim a proportion of the sale proceeds is a legal question and not something I can advise on. I have heard of people succeeding in similar circumstances, so I can understand why your friends may also think this. I would contact a legal adviser.
As you weren’t named on the mortgage, I’m afraid that your contributions will not show on your credit rating and will therefore not be taken into account in any future mortgage application. However, if your credit rating is good and the mortgage you’re applying for it affordable, you shouldn’t have any issue
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Question
Remortgaging – do I go for a five or two-year fix?
My remortgage is due in March and I am a little confused about my options. I hear two-year deals provide more flexibility (in fact I am just coming to the end of a two-year deal now) and rates are cheaper.
But, I have been discussing with my Dad and he thinks a five-year deal would be better so I can lock into a fixed-rate while for a longer period while the economy recovers from all this uncertainty. I am confused and don’t know what to do for the best. Are there any other factors which might help me?
For information, I am a in a two-bed flat in Southsea, Portsmouth, work for the NHS as an occupational therapist and I have around 20% equity now, I believe. I am 32-years-old and am the only person on the mortgage. I have no plans to move in the next few years – but obviously you never know!
Answer
It’s a tricky question to answer; the ‘right’ deal hinges on many things, but mainly cost and personal plans.
I suspect a two-year rate will be cheaper than a five-year. However, your Dad is right, there’s a lot to be said for certainty, now more than ever. Knowing where you are with your largest monthly outgoing for the next five-years can only be a good thing!
On the other hand, if you think you’ll want to move in three years, being locked into the mortgage can be frustrating (or expensive if you have to pay early repayment charges).
Personally, I don’t think interest rates going up significantly in the next couple of years – the economy has a lot of recovering to do first. Therefore, a two-year deal might not be a bad choice, especially as you’re young, single and life changes, so flexibility could prove more important.
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