Buying house with house to sell/rent - Urgent pls help!

Tra77

Not sure if I'm posting on correct board but anyway. . .

property has suddenly come to our attention that's currently under offer (2 weeks ago) but offers still invited

we currently have a property that's not on the market (approx. value 100-115K) we have approx. 38K (maybe a bit less) left on mortgage

looking at purchasing new property for 175-180K

with our current situation how could/should we best proceed - obviously we're not in the best position to make an offer, we're toying with the idea of renting our current property initially with a view to selling but really looking for a quick (most cost effective) fix should we wish to proceed.

pie81

To be honest I don't think there are any sensible options available to you other than to get your property on the market ASAP. Only once you have your property on the market (and ideally under offer) will you be seen as a serious option as a buyer, since you will need the cash from your own home sale to buy the new place. Given that the new place is already under offer I would think you are likely to miss it anyway given the time it will take to get on the market. sorry.

Tra77

I was wondering about the possibility of a 2nd mortgage or increasing my current mortgage (don't know if that's possible), renting would easily cover existing/current mortgage plus give me some additional income.

Another thought was, my sister rents at the moment so may be interested in renting my property. My dad is also mortgage free and could potentially take a mortgage on my current property and rent to my sister - ha ha how cheeky am I!

Just the timing though like you say, pie81 ;0(

pie81

trouble is, I think you would need some actual cash (ie savings not mortgage cash) to act as the deposit for the second mortgage. the mortgage company for the mortgage on your second property will want you to have a cash deposit and I think they will not accept mortgage money on your first property as that deposit. do you have savings that could act as the deposit?

Tra77

again 'Dad' springs to mind ;0)

pie81

well if you can raise some cash to act as the deposit for a mortgage on the 2nd property then you MIGHT be able to get there. 2nd mortgage company would have to be aware that you already have a mortgage on another property though and would have to be ok with that - means you might not be able to access the best rates. Also would take a while to find and arrange - which may mean you miss the deadline for this new house.

if you did manage to get the 2nd property, you would then convert your 1st mortgage to a buy to let mortgage (NB rate will go up) and then sell the 1st property as soon as possible.

BUT this is a very risky strategy - it could take a long time to sell the 1st property, property value could go down in the meantime, you might not be able to rent it, in the meantime you are servicing 2 mortgages.

Given the 2nd property is already under offer to someone else I do think you should let it go...

Tra77

I'm now thinking on a 'let-to-buy' as opposed to a buy-to-let