Mortgage 'Bridging' loans

Jake_the__Peg

Hi,

Does anyone know how you go about raising money for a house before you have sold your previous one?

We own our property worth around £130,000 - with no mortgage. We are buying a new property at £190,000 and the lady that is selling wants an immediate sale (well, within 6-8 weeks).

We need a £70,000 mortgage for the difference - but want to complete before we sell ours (we need a mortgage for the full £190,000 until ours sells). We realise that this will obviously involve us paying a lot more interest, but once ours sells we could pay off the £120,000 asap.

Would mortgage lenders be prepared to lend 100% on the basis that a large proportion would be paid back in the very near future - say, if we signed something saying our present house is collateral. Obviously, we would also not want to be penalised for paying off a large sum early - so a flexible mortgage would suit.

We do not have the incomes to raise a mortgage of £190,000 between us, but surely if it is spread between two properties (with a equity of over £300,000) would be OK?

Any ideas as to how we can go about doing this? - all comments really appreciated!!

Jo

homer_j_3

If you have no mortgage on the current property then you could use this as a deposit for your new property.

Could you post your income and employment status and it will give us a good starting point.

There may be other questions that we need to ask however, we can get started if you disclose the above.

MortgageMamma

You need to speak to a whole of market intermediary. Your situation is not overly complicated and is doable, but its which way that works best for you that needs to be identified. Obviously a lot more information would be needed than can comfortably be posted on a public forum.

Ask around your contacts for a recommendation for a good whole of market mortgage broker, failing that, state which area you are in and one of the brokers on here may be able to help

herbiesjp

Can you not raise a £70k mortgage on your current residence fees free on a scheme with no early repaymenst charges.

This way it costs you little to set up, and will cost you little to close down.

Once you have sold your property you can pay off the mortgage in full without any high penalties

Jake_the__Peg

Hi,

Thanks for replying to my post.

My husband earns around £22,000 a year. Later this year I'll be doing teacher training and will receive a £9,000 bursary (tax free) plus I can earn around £4,000 (tax free) doing private tuitition.

I've spent the last few years doing an BSc and MSc, so I have not had any real income over this period. I did spend several years working full time before this period though.

We do not have any other debts (no hp, credit cards, store cards) and like I said - we have no mortgage on our current property.

We would be looking to have an interest only mortgage for the next 1 or 2 years - and then switch to repayment when I start working full time (and will earning £20,000+). Ideally we would like a flexible mortgage - where we could pay off more if we wanted to.

What options are available to us?. If we remortgage my present property for a deposit on the new property does this class as a remortgage or a new purchase since there is no existing mortgage?

We want to try and keep fees and interest payments whilst we have the two properties to a minimum and we would appreciate knowing what options are open to us to consider.

thanks

J & P