Buying a house before selling existing property

shirlgirl2004

We were in this situation about 8 years ago. I spoke to RBS who our original mortgage was with. We had applied for a new mortgage with them too. Unfortunately after nearly 2 weeks they were still shuffling paperwork so we went elsewhere and got a mortgage in principle the same day. When I told RBS this they told me that we'd have to change our current mortgage to BTL (even though it wasn't going to be let) as it would not be our main residence. Well we ignored them and just bought the new house and kept everything else the same. RBS were none the wiser and the Abbey National didn't know/care.

littlened

ok thanks,

I'll ask our IFA about proceeding with a mortgage without touching our existing one. I'm concerned about the extra arrangement fee, and also the cancellation fee once we do decide to cancel the house.

silvercar

When we have done a straightforward move, the condition of the new mortgage was repayment of the old one.

Logically lenders don't want your income to be unable to stretch to 2 mortgages. In this climate they would be more concerned as property can take ages to sell, leaving your income stretched for longer.

Years ago, if you wanted to buy property 2 before the sale of property 1 you applied for a bridging loan.

littlened

silvercar wrote: »

When we have done a straightforward move, the condition of the new mortgage was repayment of the old one.

Logically lenders don't want your income to be unable to stretch to 2 mortgages. In this climate they would be more concerned as property can take ages to sell, leaving your income stretched for longer.

Years ago, if you wanted to buy property 2 before the sale of property 1 you applied for a bridging loan.

That's what our IFA said the other day, also that usually its a condition of the new mortgage that you pay off the old one.

nick_hill

Hi there Little ned we are going to be in the same position soon

did you get any further with your IFA or mortgage?

cheers

Nick

enina

I am currently in the process of trying to do the same thing, had new mortgage agreed in principal (with same lender - Halifax). They said all that was required in order to issue formal offer was me to sign a 'Consent to Lease' form at my local branch. When I went to do this, I was told I could no longer remain on my existing product which is a tracker mortgage and has just been reduced to £595 a month. They said I had to switch to a new fixed rate with a three year tie in and pay around £1,000 arrangement fee for the privilege! This new mortgage would then cost me just under £1500 a month!!!! Is it me or is this daylight robbery? Not the nominal sum mentioned on a few threads on here.
I hope you have better luck.

poppysarah

enina wrote: »

They said I had to switch to a new fixed rate with a three year tie in and pay around £1,000 arrangement fee for the privilege! This new mortgage would then cost me just under £1500 a month!!!! Is it me or is this daylight robbery? Not the nominal sum mentioned on a few threads on here.
I hope you have better luck.

Nominal compared to the risk of you not being able to pay. Nominal compared to the mortgage fee. Nominal compared to the amount you've paid for the house.

enina

poppysarah wrote: »

Nominal compared to the risk of you not being able to pay. Nominal compared to the mortgage fee. Nominal compared to the amount you've paid for the house.

Surely increasing mortgage payments by 2 1/2 times would somewhat increase the risk of a borrower being unable to pay?!!!!

poppysarah

enina wrote: »

Surely increasing mortgage payments by 2 1/2 times would somewhat increase the risk of a borrower being unable to pay?!!!!

I think increased house prices have done the same thing...

littlened

enina,

We've got our mortgage with Abbey, and it looks like we're getting the mortgage for the new home with them as well. My IFA has spoke to their regional rep, who said we can get the new mortgage providing we get a letter of consent from Abbey for our existing property.

I've just got a letter this morning from Abbey, basically, we need to pay £95 admin fee, and notify our insurance company and that's it. Because we're valued customers (apparently), the interested rate is staying the same and we don't have to renew our mortgage.

I'm shocked your mortgage is going to increase so much per month? Surely something is up there? What is your current interest rate and what is the new interest rate they want to put you on?

Our mortgage is currently £419 a month at 6.44%, in order for our monthly payments to increase by 2.5 times, then our interest rate would need to increase to over 20%.