Mortgage on a lease?

Question

I don't understand, why a bank or BS, will not give you a mortgage on a leased property, with 51 years less on the lease, when the mortgage is taken over 25 years? Any ideas?

Answer 1

the way I understand it banks will give mortgages on leaseholds provided the leased property has at least 75 years of life. this way you can still value that property higher cause the life is longer. (after finishing your mortgage at say 25 years you still have 50 years of lease life value)

Answer 2

Because in 25 years there will be so little years on your lease that your property will be worthless. So if you get to year 18 and stop paying the mortgage the chances are the lender will not recoup their money trying to sell a property with less than 35 years to run. They are saving your bacon saying no - never buy a property with less than 70 years to run ideally 99 years and over. Remember the landlord does not have to renew the lease - he can keep the property and kick you out of a flat you have bought (whoops - leased) from him/her. Good Luck

Answer 3

Banks _will_ lend on leased land property when the lease term exceeds the mortgage term IF there is a deed.

If you simply have a long-term lease (but did not "purchase" the property for an upfront amount), then there's no collateral, unless the property is commercial. Private money investors may lend on this, however, to about 50% or 60% loan-to-value.

Hope that helps!
r
RogerV_dotcom

Answer 4

What i dont understand is why you would take a mortgage on a lease. If you want to take out a mortgage, do it for a property you are going to buy. As for the bank, they will see no collaterole. I am guessing if you aren't able to repay your mortgage they cant take the property away from you because it isn't yours.( unless some sort of crazyy agreement is made.)

Answer 5

they should do? is the property with a lease above a shop? If so some lenders (but not all) dont like to lend above a shop. You should get in touch with an INDEPENDANT mortgage advisor, explain the situation and they will have a look through a list of about 100 lenders who should be able to help you.

Answer 6

Search around. There are places that specialize in Lending for Investment Property. The rates aren't as godd usually, but you can find someone who will. Find out who other landlords use if you are new to the game. Real estate people and Mortgage Lenders sometimes know people as well.

Answer 7

You would probably need to get the lease extended. They usually like 80 plus years left.

Just to be sure, ask the mortgage lender what their reasons are.

Answer 8

Yes but of course any financial institution can mortgage your property and you can arrange for the rent received to be adjusted for the repayment of the amount thus taken from the financial institution. This way the financial institution will be in a much secured position for repayment of the loan amount.

Answer 9

Because they are harder to sell with a shorter lease - its just security. They're fussy when they lend such large amounts I guess. You'll probably find problems with anything under about 90 years I'm afraid xx

Answer 10

debt consolidation

if someone wants to get out of debt today it is pretty easy with a debt consolidation plan
however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is:

http://umgarticles.atspace.com/debt-consolidation.htm