Mortgage Possibilities - Creative Advice Needed! - House to sell

dodgy

Hi,

We own a house (with no mortgage) which is probably valued around £220K today. We want to move to a different area and have this week noticed a new build property that we are interested in which has had a significant price cut. It won't be around for long at the new price, so I am thinking if it is possible to get a mortgage for the new property, repaying a substantial part when I sell the old property.

The new place is now £360K, and we could put down around £70K deposit from savings.

What sort of earnings, in this market, would you need to be offered a £290K mortgage? I'm in full time work, but my partner is on maternity leave currently (but going back to work in Dec). If they are still offering 3.5x salary then I could probably just about get £290K, but it'd depend how much notice they take of bonus's and the like.

Is a £70K deposit on a £360K house acceptable in these market times? That's a 19% deposit.

Would banks take any account of the fact we already own a property which we are trying to sell? Can this be used in an inventive way to more easily obtain a mortgage?

Is the most sensible route to find a mortgage, ensure it's flexible and then simply repay a lump sum when the old house sells?

How can I take advantage of offers only available to people with low LTVs - when the first house sells the resulting mortgage will only be approx 25%. Would getting a smaller mortgage on each house be the thing to do? Are mortgage companies flexible enough to understand my circumstances and adjust their offerings?

Would a mortgage broker be the right place to start. This feels complicated, but perhaps it's just me complicating things where they don't need to be so!

If we decided to move forward, do I need to show the developers a mortgage agreement in principle before they will let me put a deposit on the house and take it off the market?

Thanks for any advice.

Robert_Sterling_3

dodgy wrote: »

We want to move to a different area and have this week noticed a new build property that we are interested in which has had a significant price cut. It won't be around for long at the new price.

I think it will be around for longer than you think.
I think the house is still probably overpriced.
I think they might do what looks like a good part exchange.

I have only dealt with the easy part of your post.
Nothing very inventive here.

Good Luck.

dodgy

Hi,

I tried Part Exchange, they told me that they aren't doing any currently as they have a lot on their books already. I'm also out-of-area which they don't like much either.

House came down from £425 to £360 on Monday this week, so it's probably close to a fair price, I agree it was previously overpriced.

silvercar

If you couldn't get a mortgage for 290k on the new place, you could get a BTL mortgage on the old place. This would release some funds to increase the deposit on the new place. Provided you got a mortgage with no early redemption penalties, you could repay the mortgage on the old place as soon as it sold.

This way (getting two mortgages) would increase the costs involved (two lots of mortgage fees and surveys), so make sure the property is worth it!

Conrad

There is a possibility to raise capital on the existing one and have a new 75% on the new one. That way you get the better deals.

As for income - if proof is requested then an analysis of the non guaranteed elements will be undertaken by an underwriter.

Proof of income might not be requested in which case some lenders do not ask for a breakdown, but merely a gross earnings figure. This can be useful as those requiring a breakdown will invraibly not use 100% of elements other than basic salary.

Good luck

saveallmymoney

I've thought about a similar scenario but was wondering does the BTL mortgage (which in theory would be payed for by the renting out of the old house) reduce the income mulitple they will give you on the new house?

silvercar

saveallmymoney wrote: »

I've thought about a similar scenario but was wondering does the BTL mortgage (which in theory would be payed for by the renting out of the old house) reduce the income mulitple they will give you on the new house?

The amount given for the BTL will be based on the (potential) rental income. This is used to increase the deposit on the new property, so you need a smaller mortgage and hence lower income multiple on the new property.