New house purchase + Current flat rental - Questions/HELP !

Mehullakhani

Hi All

My wife and I have started thinking about moving over the last few weeks, and went out today to do some viewings, only with a few to see whats available.

As luck would have it, we have just seen the most perfect house, and it is very well priced for the local area at £750k. 6-bedrooms, schools are good etc etc.

The whole thing has caught us unaware, and I havent really had a chance to contact any banks etc, and so would be grateful for any opinions. The other problem is that this house had a constant stream of viewings today - to the point that we were all allocated 30min slots, and this wasnt the EA chatting rubbish, we saw plenty of people coming and going. I am pretty sure that this place will be gone by end of monday.

We currently live in a 2-bed flat in a very exclusive part of NW-London. Value - approx 400k on a good day, with no mortgage. Local EA's would love to have this property out to rent, and can get £1200-1300 pcm with no problems, and on corporate/long-term lets.

We could put around 75k cash into any arrangement also.

So the options are:

1 . Put our flat up for sale. We might have to sell quickly so might only realise 375-350. With the cash we are prepared to put in, we would also need a mortgage of 300k, which would be no problem to get from the bank.

2 . We really dont want to sell the flat at all, as it is in an area where flats come up for sale very rarely, and it has such great rental potential. Could be remortgage the flat, and take the cash out, and put it towards the new house ?
Say taking 300k out, adding on 75k cash, and then taking a mortgage out for 375k, again a mortgage which we could easily get.

Is option 2 feasible ? What would people recommend ? Any problems that I have not thought of ?

Thanks for all your help . . . . . . . here is to the next 24 hours of thinking carefully !

R

Mehul

socrates

Mehullakhani wrote: »

Hi All

My wife and I have started thinking about moving over the last few weeks, and went out today to do some viewings, only with a few to see whats available.

As luck would have it, we have just seen the most perfect house, and it is very well priced for the local area at £750k. 6-bedrooms, schools are good etc etc.

The whole thing has caught us unaware, and I havent really had a chance to contact any banks etc, and so would be grateful for any opinions. The other problem is that this house had a constant stream of viewings today - to the point that we were all allocated 30min slots, and this wasnt the EA chatting rubbish, we saw plenty of people coming and going. I am pretty sure that this place will be gone by end of monday.

We currently live in a 2-bed flat in a very exclusive part of NW-London. Value - approx 400k on a good day, with no mortgage. Local EA's would love to have this property out to rent, and can get £1200-1300 pcm with no problems, and on corporate/long-term lets.

We could put around 75k cash into any arrangement also.

So the options are:

1 . Put our flat up for sale. We might have to sell quickly so might only realise 375-350. With the cash we are prepared to put in, we would also need a mortgage of 300k, which would be no problem to get from the bank.

2 . We really dont want to sell the flat at all, as it is in an area where flats come up for sale very rarely, and it has such great rental potential. Could be remortgage the flat, and take the cash out, and put it towards the new house ?
Say taking 300k out, adding on 75k cash, and then taking a mortgage out for 375k, again a mortgage which we could easily get.

Is option 2 feasible ? What would people recommend ? Any problems that I have not thought of ?

Thanks for all your help . . . . . . . here is to the next 24 hours of thinking carefully !

R

Mehul

For the mortgage part of this question I would ask on the Mortgage Board.

My feeling on this particular thread is:

There have been several people who have asked similar questions and when they eventually went to their lender it all fell down like a pack of cards.

Secondly if you are at the beginning of the process i.e do not even have your funds in place - and there are so many viewings my feeling is that you will not be able to move quickly enough.

Perhaps you should get some kind of idea from a mortgage advisor as to how much you can raise and the mechanism to do it.

Remember the lenders criteria has been tightened up and this kind of deal was easy a couple of years ago.

One other thing in mind - you say your present property is valued at between £350-£400k - are you sure the rent would only be £1200-1300 - that sounds low to me.

Perhaps what I am trying to say is you need to do a lot more homework - once you are armed with FACTS then you can proceed - if you miss out on this one then so be it - there will be others