Mortgage Advice Wanted please

djd68

Hi, wondering if anyone could give me some advice please.

We currently have a £300k mortgage on a £575-£600k property. Mortgage is a 0.4% base rate tracker with Barclays (repayment). This is portable up to the current outstanding balance.

We have found a new house which we want to buy which is great value at £780k and have had our offer accepted. Unfortunately, the cash buyers who were buying our house have just pulled out (can't get a mortgage).

We had a mortgage agreed in principle with Barclays where we would port the existing £300k and get another £245k on a 4.99 5 year fixed (putting donw a £235k deposit).

We doubt our vendor will hang around for too long as the main reason they took our offer was because we were in a good position with a short chain.

The rental value for our current property is between £2500 and £3000 per month and we have about £80k in savings.

I earn about £100k basic plus 20% bonus and my wife is self employed. On a good year she will make £120k but in the last 3 years (due to having children) it has been more like £50k. She has accounts going back 6 years showing her pre-children earnings. We can comfortably afford £3k per month in mortgage payments.

My question is, is there any way that we could keep our existing house and get a reasonable mortgage on the 2nd. Alternatively, is there any way we can get some kind of financing until we sell our current house. It is in a good area and has had lots of viewings. I imagine we could sell it comfortably in 3-4 months but I don't think our vendor will wait that long.
I would obviously like to port my existing mortgage if possible.

Many thanks for your help.

silvercar

Unfortunately, the cash buyers who were buying our house have just pulled out (can't get a mortgage).

then they weren't cash buyers!

Alternatively, is there any way we can get some kind of financing until we sell our current house.

open bridging loan. In the present climate these are difficult to come by. Talk to your bank, your wife's business bank, your mortgage lender or a mortgage broker.

The rental value for our current property is between £2500 and £3000 per month and we have about £80k in savings.

On that rental value you would be able to ignore any BTL mortgage on the place and only have to worry about your income being sufficient for the new mortgage.

780-545=235k. 235k + 300k -80k = 455k. So you need a BTL mortgage of 455k on the current property. You won't get that on a BTL mortgage as the LTV is too high. Also it would leave you with no savings, a difficult position with a rental to support and maintenance on two homes.

You could ask Barclays for consent to let and see if they will lend you more on the new place, but the numbers look too tight to me.

HelpWhereIcan

djd68 wrote: »

We doubt our vendor will hang around for too long as the main reason they took our offer was because we were in a good position with a short chain.

They may want to move on, but the current market dictates that most vendors still have to find a proceedable buyer that could move quicker than you.

This was easy before, but in these days of collapsed chains it is not as simple as some agents would have you believe.

djd68 wrote: »

The rental value for our current property is between £2500 and £3000 per month and we have about £80k in savings.

Those figures should allow you to get a buy to let mortgage for the 455k you need to keep your arrangement with the woolwich as it was - as long as the property is worth the £600k.

If it is not, you will need to see what the max that the woolwich will do for you is. Depends on credit score but could be 5x joint depending on accounts, contract re bonuses, overall affordability, credit commitments etc.

170k x 5 = 850 so could be possible to increase the loan on the new house to compensate for any shortfall in the buy to let.

Buy to let rates will need to allow around 6% +/- 0.25%; fees in the region of 2.5% and early repayment charge in first couple of years so not ideal but may still be the cheapest way even with the fees taken into account

djd68 wrote: »

My question is, is there any way that we could keep our existing house and get a reasonable mortgage on the 2nd. Alternatively, is there any way we can get some kind of financing until we sell our current house. It is in a good area and has had lots of viewings. I imagine we could sell it comfortably in 3-4 months but I don't think our vendor will wait that long.
I would obviously like to port my existing mortgage if possible.

Many thanks for your help.

Always best to keep your porting arrangements in place.

The other option is to get bridging finance as long as you are reasonably sure that you will sell in a short period.

Cost around 1.5 - 2% per Month; 1 - 2% arrangement fee and a possible exit fee of the same again so may not work out any cheaper than paying an early repayment charge on a buy to let.

You may be able to roll the repayments into the loan but all (including cost) is very much a case by case basis.

Get some formal advice - far too many variables to answer properly on a forum and is one of the situations where diy and assumption can be expensive.
Hope this helps - Good Luck

djd68

Thanks for the advice. When I said "cash buyers" I meant people with nothing to sell.

I guess I will probably hold on and try and get another buyer. The cost of any interim financing gives me a bit of leeway on my asking price.

Are Barclays likely to issue a consent to let?

silvercar

The problem with consent to let is that it leaves your current mortgage where it is, when really you want to port it to the new place.

We did something similar, but it was 3 years ago when lending was more flexible. We took the existing mortgage with extra lending to the new place and got a BTL mortgage on the smaller property with a different lender. That way the mortgage with the exceptional good deal was on the long term family home.

Conrad

Right this is a common problem, and there is a solution, until July 1st only!

I have just done this for a high earning money broker - almost exactly your situation - you sound just like him!

I dont want to discuss this on an open forum, feel free to PM (I never invite PM's - this is a first!)

djd68

Hi Conrad - have sent you a PM.

Thanks.

Peelerfart

"I dont want to discuss this on an open forum, feel free to PM (I never invite PM's - this is a first!)"

Bet you say that to all the high earning money brokers ! :rotfl: