rent to buy

hi,
Im in need of some advise again.
We were turned down for a mortgage of 90k today by BOI. they didnt give offer us anything.
the reasons were didnt save enough of the deposit ourselves. (Mum gave us 12k and we saved 2k in the last 6months)
and because we have only 1 income of 30k plus bonuses and overtime.

the house we fell for is lying quite a while and is considerably run down.

We wondered if we would be able to set up a buy to let agreement on our own with the vendor.

Our thinking is it would secure the property for until we did get a mortgage.

devastated at the news.

mo

I am currently renting and have been doing so for the past 10 yrs. We pay 560 pm on rent, so add that to the 80 pw savings we are putting away twice a mortgage payment. know all about running a household and the costs involved.

Mo

cashier,
the 2 reasons were:
we didnt save enough of the deposit ourselves (she said at least half)
theres only 1 income and its not enough

Im on disability at the moment, dont know what the future holds as i have 2 chronic illnesses but im going to try and get a pt job for 6 months+ and save some more and try again.

In the meantime i would like to approach the vendor about renting the house.
has anyone ever done this.

MO

Sorry to hear you've not been approved. Fair play to you for trying to move forward in such a positive way. WRT renting the house you want to buy, I don't see that you have anything to lose by approaching the vendor. I think the answer probably depends on the current circumstances of the vendor i.e. do they have to sell to generate income to move on to another house? Rental income rather than the proceeds of a sale might not be enough for them to do this. Also the interest the house is generating in the market. If they sign a lease with you, then they will have to reject other potential buyers. Then again, they may not have had any interest in the house and will jump at the chance to rent. But certainly, as I said, whatever the case you have nothing to lose by asking. And it would be great to 'test drive' the house. I'd say lots of people wish they'd had the opportunity to do that. Whatever happens, it sounds like another year of proved savings might sway the bank in their decision. I wish you well with your health and the house in the future.

If the house you are interested in is "considerably run down", then do you propose that the current owner would spend money they may not have in bringing it up to spec (there are fairly decent standards below which it is illegal to rent out a house) or do you want to spend your money doing up someone else's house?

If it's the second option it sounds like a recipe for trouble down the line.

I know a couple who spent a lot of money doing up a house they were supposed to be buying and they were later refused a mortgage and ended up leaving the house.

Sybil

elginelf,
thank you for your kind words.
yes i think we have nothing to loose right now. i must find out the name of the vendor and approach him or her because i know the property has been on the market at least 2 yrs so we might be in with a chance.

mrs vimes,
that is a hard situation to be in. i myself am going to get back to school next September to study nursing. hopefully ill have a career at the end of it and our income will be considerably higher. im remaining positive that i will get a mortgage and own my own home. the house is fit to live in imo and it suits our needs perfectly.
in regards to doing up someone elses house, ive always decorated and improved the houses ive rented.

mo

How is a house that needs considerable work to it fit to live in? Also you mentioned you suffer from illnesses, do you need the stress of doing up a house?

What is wrong with renting, you presumably have a landlord who takes care of the property you live in? Would you not be better off renting until you get a nursing job, and in the meantime build up a decent deposit. There are many hidden costs to being a house owner, particularly one that needs work.

And yes, you can approach the vendor to see if he will rent the house to you. He might be delighted, particulary as he seems unable to sell it. Maybe it's overpriced.

hi Bronte,
its only cosmetic if im honest. nothing structural. the kitchen is a bit battered, floors needs sanding, carpets renewed, walls painted and garden gutted as its very overgrown.
the house isnt overpriced imo. its a 4 bed detached with private entrance and views of lough swilly with scope to add more rooms upstairs and a good size garden. all for 100k. similar properties are going for double that in this area.