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Will a bank give a mortgage for a house with unpermitted work?

Thinking of buying my late grandfathers house at a huge discount from his estate, doing basic updates, then selling. But I have found out that he finished the attic and put in a driveway 40 years ago without permits. So the upstairs is not on the CO and no survey exists at city hall so nothing with the driveway shown on it. When either I or a future buyer tries to get a mortgage, will the bank even notice these issues? I can afford to sell the house at a discount if buyer have an issue, but if they can't get a mortgage I am in trouble. I could get everything legalized, but would rather just make a quick flip.
  • October 10 2012 - Yonkers
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Answers (3)

If the upstairs is not on the Certificate of Occupany, then you can not include it in the square footage, which is a big deal. With respect to a mortgage, the bank wont care as long as comparable houses appraise for the same value. However a future buyer will care. It is a judgement call. If you need help...AskRey.
  • October 11 2012
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Profile picture for Chris Corica
This will cause problems with the loan process. The appraiser will make note of the unauthorized work and the bank will request everything be corrected prior to closing. Best of luck.
  • October 10 2012
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Get some local experts (Realtors, contractors, appraisers) to help you witn cost estimates for everything, and a cost/benefit analysis of your situation.  Thats really the only way to figure out if you should sell now (for cash) as-is or repair/complete at a cost.
  • October 10 2012
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