NAMA Property not completed - want to buy

Hi all,

The hubby and I have been looking at houses to buy for some time now, and through the jigs and reels of it all think we have found the perfect opportunity.

There are some incomplete properties around (all NAMA), one in particular we are extremely interested in buying as is. The property is being sold as is for a great price - we would have no issue getting a mortgage for the sale price. We intend to purchase the property as the structure it is (not up to 1st fix yet), and complete the required works over time and without further loans. We estimated 2-3 years for this, which for us is not a problem. The problem is that I've been told over the last few days from someone who was also looking at these properties that the banks will not allow you to take out a mortgage on these properties as is, as they are not "completed and liveable". It would seem when they went for approval on the property they liked, they were told they would need to apply for a "Staged Mortgage". Can anyone tell me is this the case for all banks?

Secondly, can anyone advise if it is possible to purchase it at its current price and build as we can overtime? Is the only option a personal loan, which, lets face it, will not be given out.

We are in a very fortunate position of not having a current mortgage or rent costs and so all of our earnings plus savings would be put toward the completion of the house each month.

Can anyone shed some light for me, and explain how this would proceed?

Dmos I was looking at an uncomplete property recently. Basically complete except for central heating, septic tank etc. The auctiooner told me that he was unable to sell it as no bank will loan money on a property this is not complete. Not sure how true this is but that is the information I was given in the last month.

Bronte thanks for that. It definitely confirms what others have been telling us. I placed a call to my bank this morning but was unable to speak with the person we are dealing with for the mortgage application. I'll be chasing up in person tomorrow morning in the branch.

I just cant seem to get my head around this or understand the logic - if they are not willing to allow people borrow the sale amount only and complete the works in their own time, how do they expect to sell them? There has to be something they can do, otherwise there'll be shell properties all over the country for years to come.

Before you get your hopes up, and ideally before you bid, so that you're armed with all the information a bidder should really have, ask to see a copy of the contract for sale and realistically get some advice from a solicitor on it.

You need full information on what you think you're buying - it will probably not be as straightforward as a standard house purchase, legally.

Thanks Badran - have already discussed the Solicitor bits with the hubby and we'll absolutely asking their expertise on it before making any kind of an offer.

In an ideal world, we'd like to get a mortgage for the sale price only. Then bit by bit, complete work to 1st fix, followed by 2nd. etc. etc. while only using our savings and wages - NO other loans. Eventually have the property completed and ready to live in. we're in an ideal situation for this as we're in no rush to leave where we are and do not have any rent / mortgage payments. If the banks are not happy to approve a mortgage on the sale price only then I cannot see them selling these properties at all. It all seems so odd.

You should not pin your hopes on such a mortgage as no Bank will currently lend towards the position you have outlined.
Whether they should or should'nt is an argueable point!

Sure, I understand. But can anyone actually tell me the reason why they won't? Is it simply because the house is not completed?

Yes, exactly! A Bank will potentially lend to a client to construct a property, but will only lend on the basis that the client/s has the full funding available to complete that property. Theoretically if the property in your own illustration cost 80K and an engineer certified that 20K would fully complete the property the Bank could lend the funds to you on that basis iof you had the 20K available. However, the practicalities of certifying the remaining work would probably not warrant the risk etc of agreeing to the loan, so Banks will not consider such proposals unless on a very low LTV basis.

I get you, thanks for the explanation. I reckon we'll steer clear from anything thats not completed to be honest. Its a pity as it would be an amazing lifelong home when completed. Oh well!

44brendan said:

Yes, exactly! A Bank will potentially lend to a client to construct a property, but will only lend on the basis that the client/s has the full funding available to complete that property. Theoretically if the property in your own illustration cost 80K and an engineer certified that 20K would fully complete the property the Bank could lend the funds to you on that basis iof you had the 20K available. However, the practicalities of certifying the remaining work would probably not warrant the risk etc of agreeing to the loan, so Banks will not consider such proposals unless on a very low LTV basis.

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The OP mentions saving above so does this mean they could show they have the funds available to complete the property? It seems very odd to me also, surely this has the effect of making sure uncompleted properties can't be sold further damaging the property market?

Hi. I'm in the same situation. I'm trying to buy a unfinished house as well. the think is to get a mortgage You have to get a HB11 certificate from Homebond, and to get that certificate house have to be finished to some stage (1st and 2nd fix, floors, stairs, doors, windows, driveway, kitchen) that is just beginning of the list that have to be done. and I can tell You that mortgage looks deferent in that case as well. for example if You buying a house as it is for 150 000e and it cost You 100 000e to finished it You need a 43 000e Your own money for deposit. they can give You only 75% of 100 000e =25 000e and then 150 000 + 75 000= 225 000e, 92% of that is 207 000e, so it will give You 43 000e (207 000 + 43 000 = 250 000e) I hope i could help.