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  • FIRST POST
    • MsAbc
    • By MsAbc 14th Jun 17, 3:00 PM
    • 2Posts
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    MsAbc
    Avoiding the chain
    • #1
    • 14th Jun 17, 3:00 PM
    Avoiding the chain 14th Jun 17 at 3:00 PM
    I currently own a £300k house mortgage-free. I'm looking to sell this and buy a new house for about £450k. I have a salary of £50k and £50k cash for a deposit.

    Trying to co-ordinate the sale and purchase in a traditional chain sounds messy, potentially slow and with a real risk of falling through. Likewise, selling my current house and moving into temporary accomodation while looking for a new house, doesn't appeal for reasons of cost and time.

    So, how easy would it be to hold on to my current house while I search for and purchase the new house, then sell it afterwards (it's in a popular area, so should sell reasonably easily)? The idea would be to use my current house as a security to obtain a mortgage for the new house, then sell my old house and pay off the majority of my mortgage?

    Is there a name for this type of mortgage deal? Would the fees be prohibitively expensive? Any advice on common problems to look out for?
Page 1
    • amnblog
    • By amnblog 14th Jun 17, 3:23 PM
    • 9,659 Posts
    • 3,725 Thanks
    amnblog
    • #2
    • 14th Jun 17, 3:23 PM
    • #2
    • 14th Jun 17, 3:23 PM
    You don't earn enough for a £400,000 mortgage so you need to raise funds on, or sell your current property to make the new purchase
    .
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • aneary
    • By aneary 14th Jun 17, 3:40 PM
    • 429 Posts
    • 308 Thanks
    aneary
    • #3
    • 14th Jun 17, 3:40 PM
    • #3
    • 14th Jun 17, 3:40 PM
    Bridging loan's but they are extremely expensive and you'll be stuffed if something went wrong selling your house or the sale itself dragged on.
    • AnotherJoe
    • By AnotherJoe 14th Jun 17, 3:48 PM
    • 7,063 Posts
    • 7,537 Thanks
    AnotherJoe
    • #4
    • 14th Jun 17, 3:48 PM
    • #4
    • 14th Jun 17, 3:48 PM

    Trying to co-ordinate the sale and purchase in a traditional chain sounds messy, potentially slow and with a real risk of falling through.
    So, how easy would it be to hold on to my current house while I search for and purchase the new house, then sell it afterwards (it's in a popular area, so should sell reasonably easily)? The idea would be to use my current house as a security to obtain a mortgage for the new house, then sell my old house and pay off the majority of my mortgage?
    Originally posted by MsAbc
    Unless you are buying a newbuild, that risk ofa chain falling through still exists, there would still be a chain.

    And you cant use your current home as security for a mortgage, unless its a bridging loan, which also brings its own stresses and (very high) costs.

    If your existing house would "sell easily" then just focus on selling not for the most money but to the best buyer, perhaps one with no chain below them, or not at the limits of their finances ( for example) and resign yourself to being in a chain since you most likely will be in one anyway.
    • davemorton
    • By davemorton 14th Jun 17, 5:16 PM
    • 25,778 Posts
    • 301,845 Thanks
    davemorton
    • #5
    • 14th Jun 17, 5:16 PM
    • #5
    • 14th Jun 17, 5:16 PM
    Or sell and go in rental for a few months while you find your new home.
    Im a board guide on Pie Making Moneysaving. I'm a volunteer to help the pie production & consumption run smoothly. I can help merge tastes and fillings. Any pies made are mine & are not those of other Moneysavingexperts. Im a board guide not a qualified baker and as such do not make every type of pie. If you spot a quiche or flan please report it.
    • MsAbc
    • By MsAbc 15th Jun 17, 11:12 AM
    • 2 Posts
    • 0 Thanks
    MsAbc
    • #6
    • 15th Jun 17, 11:12 AM
    • #6
    • 15th Jun 17, 11:12 AM
    Thanks everyone for the replies. I'd heard about bridging loans and already dismissed them as too expensive, so I guess I'll have to suck it up, sell and move into a rental, while buying the new place. Grrrr.
    • amnblog
    • By amnblog 15th Jun 17, 11:20 AM
    • 9,659 Posts
    • 3,725 Thanks
    amnblog
    • #7
    • 15th Jun 17, 11:20 AM
    • #7
    • 15th Jun 17, 11:20 AM
    Why would you not simple co-ordinate sale and purchase like millions of other do every year?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • AnotherJoe
    • By AnotherJoe 15th Jun 17, 1:05 PM
    • 7,063 Posts
    • 7,537 Thanks
    AnotherJoe
    • #8
    • 15th Jun 17, 1:05 PM
    • #8
    • 15th Jun 17, 1:05 PM
    Thanks everyone for the replies. I'd heard about bridging loans and already dismissed them as too expensive, so I guess I'll have to suck it up, sell and move into a rental, while buying the new place. Grrrr.
    Originally posted by MsAbc
    1. Why wouldn't you coordinate sale and purchase as millions of others manage to, what makes your sale and purchase so special?
    2. You'll find it very difficult to get a short term rental property, and if you get a six month one then you'll most likely either only need a few months of that, or you'll still have an issue adjusting the rental period to meet purchase date
    3. Unless you buy new (or probate), you'll still be in a chain anyway, just a shorter one.
    4. You'll lose the protection of owning a house which gives you a buffer against house price rises. If prices rise and you cant find anything quickly, even a small % on a £400k house will be a significant amount. (obviously with falls you are sitting pretty)
    5. Dont imagine that not havinag place to sell always makes you more attractive. It does to some, to others it means you are more likely to pull out on a whim, or may be giving them grief to move all the time as they are in a chain and cant be rushed.
    • charco
    • By charco 15th Jun 17, 2:17 PM
    • 34 Posts
    • 14 Thanks
    charco
    • #9
    • 15th Jun 17, 2:17 PM
    • #9
    • 15th Jun 17, 2:17 PM
    Chains are normal. And ideal sale would be to someone who has nothing to sell but that is hard to get. Most people who are higher up the chain will have a property to sell. Look at your own situation. You are making an offer subject to your own sale.

    Some people may prefer a chain free buyer but it all depends. If someone is chain free there's always a risk they decide to walk away.
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