Problem Getting Loan for Home with Unapproved Changes?

Larescarti42 on 14/10/2019 - 18:58

Hi hivemind,

I'm looking to buy a house at auction in a few weeks time (FHB). The house has a garage on the ground floor, and the previous owner built an internal stairway from the garage up to the house, which required the removal of one of the brick piers in the sub-floor. This work was not council approved.

My solicitor pointed out that banks may not give me a loan on this house because of the unapproved modifications. I've spoken to a number of lenders, and most said they wouldn't lend for properties with unapproved structures. The bank that I have pre-approval with has said they might be able to lend against it, but that they require a valuation first, which will cost me around $800 (with no guarantees obviously).

Has anyone else had experience getting finance for a house with unapproved changes? Most places I've looked at have had some kind of unapproved changes (e.g. sheds, carports, pergolas, etc.) - i find it surprising that all the banks i spoke to said no. Similarly, I don't want to end up like that guy a few years ago who bought that hobbit house at auction and no bank would give him a loan.

Grateful for any experience or words of wisdom.

Home & Garden

Comments

  • 87percent on 14/10/2019 - 19:01
    +8

    I wouldn’t be purchasing a house with unapproved work

  • Skramit on 14/10/2019 - 19:06
    +4

    the banks i spoke to said no

    You’ve answered your own question.

    Avoid avoid avoid.

    Unless you wanna start a new thread in a few weeks “banks won’t lend me money”

  • tsunamisurfer on 14/10/2019 - 19:08
    +5

    I would not buy this property.
    What assurance do you have it is structurally sound?
    What if something happens and insurance doesn't pay due to hack jobs?

    • arescarti42 on 14/10/2019 - 22:06

      Thanks. The building inspection report notes that the stairs are unapproved, but says they're in good condition (granted this is not a structural inspection). The rest of the house is in excellent condition - it has been the one owner's home for the last 50 or so years since it was built. The stairs are probably 40 or 50 years old.

      Made me think that although not approved, they're likely to be structurally fine.

  • subywagon on 14/10/2019 - 20:44
    +2

    If you are really keen on the property you could get the underpinnings inspected and get a report and quote for repairs etc and present it to the banks. It might help.

    • arescarti42 on 14/10/2019 - 22:00

      Thanks. This had crossed my mind.

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