Urgent advice needed please - 2 mortgages?

VinsterDJ

Hi,
I was just wondering if anyone could offer me some advice...
We're selling our house at the moment. Our buyer pulled out a few days ago with only days to go before we exchanged contracts. We're gutted to say the least.
When we accepted the offer on ours, we then put in an offer on a property we really want, which was accepted.
Now our sale has fallen through, we still don't want to miss out on the house we want.
My question is, will a mortgage lender still approve our mortgage application to move, without our current one being paid off? Do they check? Could they refuse us on grounds of affordability? Is there a way around this?

Please advice.
Thanks.

yelf

yes they check. You will need a bridging loan (say hello to FAT interest rates).

Thr new mortgage offer terms would have been based on the old mortgage being paid off.

Mrs_Bumble

The solicitor is obliged to complete on everything. Try to delay the chain, get a new buyer, sure the chain won't want to collapse and preferable to bridging.

VinsterDJ

Thank you both for getting back to me. It was the news we were dreading to be honest!
Would releasing money in our current house, then renting it out be an option, or would that make things far too messy?

Thanks.

Mrs_Bumble

Depends really on the figures etc and may not be a quick solution, is a broker arranging this mortgage for you?

If not I would go to see an independent mortgage broker and let them go through all the figures/options with you.

yelf

VinsterDJ wrote: »

Thank you both for getting back to me. It was the news we were dreading to be honest!
Would releasing money in our current house, then renting it out be an option, or would that make things far too messy?

Thanks.

As above - that could get messay. If you needed to remortgage said property then you would be looking at a BTL mortgage - and they arent cheap at the moment.

VinsterDJ

Thanks again. You've both been really helpful. Fingers crossed we sell again ... !

Mrs_Bumble

Good luck!

Conrad

Some lenders can allow 2 residential mortgages subject to your income being sufficient to service both.

Or you could switch the current one to a B2L with existing or a new lender, but with a new lender the max is about 70% and rent should be in the order of 125% of the mortgage payment.

Bridging finance is only a last resort.

Or as others say, the sellers will have to wait.

VinsterDJ

Hi,
I had a meeting with the Halifax (my existing mortgage company), and they have allowed me to convert to a tracker buy to let, until I get a sale.
That way the new mortgage company (Natwest), allow the new funds to go through as existing mortgage is no longer an expense.
Monthly costs have only risen by £20 per month, providing the interest rates stay the same for a wee while yet.

So, I think this is the solution. I hope!
I didn't realise this could be done until today but apparently it's pretty common practise ....

bingibongi

& Nat West is happy for you to keep the existing mortgage on ?

From a practical point you will still have two mortgages running and to pay