Can I remortgage to cover deposit?

drdaz123

hi, this is my first post so go easy on me!!

We want to move into a bigger house and have seen one for sale at a very reasonable price and wondered if we could remortgage on our current home to raise the deposit for the new one.

We reckon our current house holds enough to cover the deposit so could sell after the remortgage no problem.

just a query... any advice greatly appreciated.

Milliewilly

Yes as long as you earn enough salary wise to cover the two mortgage multiples until yours sells - or a bridging loan which is horrifically expensive.

vegasvisitor

Could you consider taking a buy to let mortgage on your own property to release a deposit? This is what we are currently considering.

Out of curiosity, how expensive are bridging loans? I'd only bridge if I actually had a sale set up with a fixed timeframe (as an alternative to the BTL mortgage).

I can sympathise with OP as it's quite hard to find the right house if you sell your own first, making it difficult if you do it that way too - risk you might not find the house you want.

chappers

once you jump into the buying selling chain your equity will be your deposit,
e.g you sell you house for 150k your outstanding mortgage is 100k your new house costs 200k you take out a new mortgage for 150k your equity is your deposit.

vegasvisitor

Our issue is that we don't have a mortgage, so if we don't sell we need a back up plan that the bank will lend us on a buy to let mortgage. I guess if you already have a mortgage then you can ask the lender if you can let.

We would be looking to release 70k from 120k value, then deposit along with about 50k cash, then borrow around 90k to top it up to house value. On a simple sale it will be maybe 110k or so plus our 50k deposit, meaning only 60k mortgage which is obviously better.

Is our buy to let situation perfectly do-able? 90k is within 2.5 times joint salary, I assume the BTL mortgage won't count towards our salary-multiple allowance?

drdaz123

lesley74 wrote: »

Could you consider taking a buy to let mortgage on your own property to release a deposit?

we actually thought about letting it, (2nd income an' all), is it difficult to convert current mortgage to buy to let re: housing regs etc??

drdaz123

chappers wrote: »

once you jump into the buying selling chain your equity will be your deposit,

i am aware of how it works, the question was posed as we'd like to snap up this house before it's too late, waiting for ours to sell to release the equity could take a while, so i wondered if a remortgage now was the answer, then we can sell at our leisure!

vegasvisitor

Can you afford both mortgages plus fees and redecoration etc without bringing in rent? If so, not a bad situation really.

Totally understand about jumping to get the house you want - I feel the same but I worry about not selling etc.

I take it you'd give a long entry date? Last time we did this (in a better market) we counted out 16 weeks and went with that date. It seemed acceptable. I wonder if even longer would be acceptable to someone these days who is still keen to get a sale regardless of the time taken etc?

drdaz123

the thing is, the house we've seen is a repossession and have been told that upon having an offer accepted we would need to be completed within 4 weeks! which is the reason for the question.

reckon we'll go for it!!!

vegasvisitor

If it's the right price, right house etc, then I hope it all works out well for you.

Do you have any reason to think your own won't sell, and can you be realistic about sale price if you are getting what you want at the right price for your purchase?

I'd be keen to hear how you get on. I am in Scotland so the wording of these things is different up here. When you say you have to be completed, do you mean you need to legally complete, and your entry date can be any time, or do you mean keys in 4 weeks?

If you are excited about it then it sounds like the right thing to do.

drdaz123

i presume legally completed and then move in at our leisure, just spoke to an adviser and might look at btl on current property. got some maths to do first though!!