Buying a house - help needed!

justin138

Question for all clever MSE's out there!. My wife and I own our current house outright and we are looking to buy a house in Southern Ireland (or even this country). What we can't figure out is how to buy a house (we have very little savings) before selling our current house. Is it possible to get some sort of mortgage, loan etc using our house as the deposit to give us the money to buy the other property? The approximate value of our current place is £160,000. We need another place before selling our place as we have a number of animals to move. Any help greatly appreciated as we are both new to the house buying lark! We have looked for info and can't seem to find out anything.
Thanks in advance
Justin

mr218

maybe the answer to your question is that you should not buy a house before you sell your current house.
owning your home outright means that you are in a very stable position and you have to ask yourself if you want to enter a more unstable position. are you buying a house for a similar price as your current house?

However, if you want to do it, you can remortagage your current house (generally you can get upto 85% of the value) and use that money to buy a new house. for a short period, you will be owning both houses. When you sell your current house, you can repay your mortgage and end up mortgage free again. there might be penalties for early repayment and it may be worthwhile for you to choose a mortgage with low setup and redemption fees. maybe a mortgage broker can advise you.

but the best option would be to sell your house first (which depending on the price and the area you live in can take some time) and then you will be a cash buyer. you can begin by renting for say 6 months in the area you plan to move to and depending on the housing market situation, you have a vantage position and you can bide your time to find that special place.

justin138

Hi Mr218, thank you for your reply. We looked into renting for a few months whilst selling our house but the issue there is that we have a large number of animals which most landlords are (undestandably!) reluctant to take. The mortgage plan sounds good but the problem there is paying it off whilst looking for somewhere to buy in Ireland as I will obviously not be working and my wife doesn't work either. Dilemma!
It would be nice to stay where we are as having no mortgage puts us in a strong position but we really need to move!
Thanks again
Justin

*Sparkle*_3

I think if you can afford the monthly payments on the new place for a few months then there shouldnt be a problem.

Good luck

mr218

hi justin
I think remortgaging may not be a bad solution for you if you find it difficult to rent due to your animals
I think you need to have a good plan. if you can post the approximate amount of the value of your current home, your savings level and the purchase price of your new home, then you can work out a possible plan

the money from remortgaging will be in your account, which you can put into a savings account to earn some interest. this amount can then contribute towards your mortgage payments coupled with your savings.

once the money is released by selling your home, the cash in your bank will earn interest and help you pay any rent (if you can find a suitable rental property)

so i think you need to have a detailed plan and work out how much interest you can earn and offset it with the mortgage costs. it is not as complicated as it sounds and if you want to move, then it is something you have to do

GDB2222

Whilst perhaps being obvious, I should just say that most people do a simultaneous sale of their current property and purchase of the new one. That's probably how 90% of transactions take place, with a chain of people all moving on the same day. Are you quite sure that you could not do that?