Mortgage without selling current property first?

vegasvisitor

We're currently looking for a house, already have one which is completely paid off. We are looking to upsize, probably around double value, so will need a mortgage. We do however have a good deposit too, about half the upsize amount.

I'll quote some fake figures to help. Say we own a property worth £80k, we want to buy for £160k, we have another £40k for a deposit (plus money for fees and to do work - the £40 is the amount we can put down). So basically we only need a small mortgage.

The catch is that we are struggling to find a house we like. So we can't sell then buy because it's too hard to find a good house. So we need to find one then proceed (without caution) and get ours on the market to sell. We tried this last year and got offers (Feb 09), so we're confident that it will sell.

Any thoughts on how this would work for a mortgage. Obviously the straightforward case of managing to sell on time is straightforward (would give 16 week entry or similar). The scenario I'm not sure about is that if we don't sell first, need to bridge etc. We'd only consider a closed bridge - if we never had a buyer when we get close to moving we'd rent out. Would the bank entertain this given that we'd then need a bigger mortgage?

The buy-to-let scenario might be to mortgage to release funds, eg £50k, put £90k down, mortgage £70k. This would mean total mortgage of £120 which would not be within reach. How does the rental etc come into play - I'm thinking of the old 2 1/2 times joint salary - can anyone explain how this would work in this case so that I know it's do-able as a back up plan? Our house is in a good area, 3 bed and easily rentable so that's not an issue.

dimbo61

If you can I would sell your existing home and if you cant find a suitable property then rent for 6/12 months.
Being a cash buyer with your old home sold puts you in a strong position.
Find out from your bank/ local building society how much you could borrow ( without having a credit check)
Look on some of the big lenders websites for income X ie 3/3.5 X main income plus 1X second income to give you a better idea.

vegasvisitor

Don't want to have to move twice now - just want to move and get on with it. I am confident our house will sell, but just need a back up plan just in case.

It could take us more time to find something, we have a very specific area, and other things that it must have. We don't have to move, this is just a move because we can and to get a few extra things we want. It's not pressing enough for us to sell up and rent. We'd also struggle to find a suitable rental property as well (small area).

ritz55

Easiest way to do this is take out a new mortgage as a let to buy. This means your planning to let your old house to purchase a new house to live in. Once you have your new house in place it's up to you if you wish to sell your old place or rent it out.

I've just done something similar but with the intention of actually letting my old house out. Deposit was £35k and house is £230,000 so is based on a 85% LTV. Mortgage option was 5 times salary on a 35 year Mortgage, not going to mention the lender but they are about to change there name very soon and is a main high stret bank.