Best way to Finance New House...Help

Taly

Hi

Seen a house that i really want to put an offer on,asking price is £120k.I own my own home outright value £80k but have only £10k ready cash for a deposit.Noticed the more you put down on deposit lower the interest charges are.My house could do with a bit of modernisation before it goes up for sale so could i just take a second mortgage out on it for lets say £40k interest only and use £35k for deposit on new house and £5k to tidy up my present home.I would then sell present home for probably more then £80k pay off mortgage on it and use the rest to reduce new home mortgage.

Any help much appreciated

keith969

Errrm why not just put your place on the market and when you have an offer, put an offer in on the new place, then raise a mortgage for the additional funds needed?

If you are thinking of putting a deposit on a place before you have sold your existing home you're taking a big risk - it might not sell either for the price you hope or in the timescale you need.

I'd not bother modernising your existing place, chances are your choice of bathroom or kitchen will not be the same as your potential buyers.

DVardysShadow

You need 12k for deposit, but you could manage with 6k. You need perhaps 2k for upfront costs of moving plus 5k for your work. 15k, so you are short by 5k.

If you are going to spend 5k on works, it is hard to spend that amount of money quickly and get a job done in a way which makes it worth while taking on. Either go for the 120k house with what you have and take the hit on your current place, or do the work and plan on buying another place, because the 120k place may well have gone.

As a buyer, I would avoid anything which had serious work done just before going on the market. Your heart will not be in it - I would rather buy your place reduced by the cost of works and make sure they were done right.

Taly

Thanks for reply.Poss purchase is a vacant posession and has just come on market,vendor is emigrating and is after quick sake,£120k is a very reasonable price.Property of similar age/features/bedrooms are selling for £145k-£165k in same area and my cousin lives opposite and he says there have been a few viewings this weekend already.Vendor has given me first refusal and i have until Wednesday to put offer in.Where i live the market is slow for my property type,mid terrace with steps so to get anywhere near what i want i think it may be a long slog,time i dont have with new property.I can afford 2 mortgages and if push came to shove i could rent it out.I really dont know if i would be allowed to tho hence Q on here

DVardysShadow

Taly wrote: »

Thanks for reply.Poss purchase is a vacant posession and has just come on market,vendor is emigrating and is after quick sake,£120k is a very reasonable price.Property of similar age/features/bedrooms are selling for £145k-£165k in same area and my cousin lives opposite and he says there have been a few viewings this weekend already.Vendor has given me first refusal and i have until Wednesday to put offer in.Where i live the market is slow for my property type,mid terrace with steps so to get anywhere near what i want i think it may be a long slog,time i dont have with new property.I can afford 2 mortgages and if push came to shove i could rent it out.I really dont know if i would be allowed to tho hence Q on here

OK, you need to be quick, if it is marked down that much. If what you say about values is correct, there is 25k in it for you, so don't mess around doing 5k of work - just price your property attractively below the market and then allow for the cost of works.