Remortgage as bridge, moving abroad. Bad idea?

chartreuse_2

Hi all
So, we'll be moving to the USA, prob in the first half of 2009 and want to buy a house in advance of going over there. As I've found out, it's very difficult to get a mortgage loan over there until you've built up some history. I did get a quote from a UK broker, but it was very expensive.

Plus, as we're looking at spending around $120K - $150K on a house, we're below the minimum loan for most UK overseas lenders. I'm still looking at options for borrowing in the US, but have come up with two other ideas, and hoped somebody might tell me whether I was an idiot...

Our UK house is worth £165K, outstanding mortgage £109K. We'll be putting it on the market in the next week or two. Our current mortgage is 4.99% fixed until 2010, with penalties of 2% until Jan 09 then 1% until Jan 10. I've asked our lender, but they won't go above 75% LTV.

As I see it we could either:
(a) Remortgage at 95% LTV. The best deal I've found is with Skipton, raising £47K on an interest only, £800 fees, no penalties.
(b) Get a secured loan for up to £54K, giving 100% LTV.

In both cases, making up the difference from savings and any extra on a 0% SBT card. Then sell, clear everything but the card and look to deal with that over a year or so. Income is high enough to get away with it and will continue after the move.

So, am I mental? If so, how mental?

getmore4less

Both markets are in free fall sell as quick as you can and rent.

trying to time a move with a pending sale will be a big risk and a nightmare

plannig while renting is easy.

Jonbvn

Have to agree with above poster. It would be much better to sell your Uk house and rent in the US. Why the rush to buy in a falling market? You don't believe the "rent money is dead money" mantra do you?

With money in the bank you will be able to watch as the prices continue to fall, and maybe pick up a dream house for a song, so to speak.

chartreuse_2

You both make a good point. The thing is, when we move I'll be going self employed, doing the same work I'm doing now, but from the US. That means I'll need stability that I wouldn't get from renting to e.g. put in a business grade Internet connection etc.

Plus, rental properties tend to be in not great areas, where we're moving to...

getmore4less

OK sell in the UK, take out 6 month rent in the UK, cheapest place you can find.

and then plan the move buying in the US when you find some where.

The last thing you want is a house dangling in the UK while trying to set up in the US.

The move date is dertimined by the UK sale which in this marker is anyones guess.

chartreuse_2

getmore4less wrote: »

OK sell in the UK, take out 6 month rent in the UK, cheapest place you can find.

Which would normally be an excellent idea. Except, it introduces another step. As the place we'd be buying is cheap, by UK standards, I feel comfortable carrying the loan on it, until we sell the UK place. It's just a question of how best to get the loan...