Financing a new property before selling current property

njbhorn

I appreciate the likely answer is wait until my property is sold but I thought it worth looking into just in case there is a way...

We have a house not yet on the market one EA has valued it at 630K

We have a mortgage of 410K outstanding on this house

We have 70K savings

We have 2 flats one worth approx 250K and one worth 200K with no mortgage. One of the flats we stay in during the week the other we rent out.

Our intention is to sell house and live in just the new property renting out the 2nd flat.

We have seen a property that is a new build but complete and part of a new development. It is priced at 565K and there is other interest. We realise we are not in a strong position as we still have to sell our house.

Is there any way we could finance the new house with a view to selling our current house during the coming months.

I have already contacted our lender and they are not interested in extending our current mortgage if it is on the market. If the did they would extend to 80% of value.

We know we can get Buy To Let mortgages on our flats for 70% of valuation

i.e. 175K + 140K = 315K

We could get 80% Mortgage on our current house say approx 500K depending on valuation.

All this adds up to 475K leaving us some 90K short so obviously my numbers don't add up.

The frustarting thing is if we could sell our house we could finance this so easily but if there is anyone with any smart ideas or good advice we would appreciate it.

I have spoken to a broker and we could get a new mortgage of approx 520K

The current owner of the property looks like a developer so does anyone know the likelyhood of any flexibility with regard paying a heft chunk up front then the remainder when the house is sold or even some sort of part exchange?

Does these still happen?

I appreciate p/x is likely to undervalue our current property but it is an opportunity for a big lifestyle change that we are prepared to pay for I guess.

Many thanks for reading and for any advice. I am a lurker on this site but find it invaluable and a great source of useful information that can often help in situations like these.

Regards

silvercar

You could look at unsecured finance to make up the difference. Maybe a couple of loans. You could try your bank, see if they do bridging finance, or a mortgage broker could put you in touch with people who could help. If you got bridging finance it would be expensive - think at least 1-2% of the money borrowed. On the other hand taking out and redeeming mortgages on the flats will work out expensive.

I would go for a straight forward bridging loan. Then work on selling the house and flat as quickly as possible.

This is not a recommendation, but their website gives a clear indication of what can be done:

https://www.cheval.co.uk

AAD1975

The scenario that you paint is one tailor-made for bridging finance from a lender such as Cheval. A bridging finance lender would typically seek to advance funds secured against property (in this case one or both of the unencumbered flats) with repayment of the loan coming from the sale of the current primary residence. Although the interest rates of bridging finance lenders can appear high, it must be remembered that bridging loans typically have no minimum periods, exit or redemption penalties etc. Therefore, as soon as the house is sold, the bridging loan can be repaid immediately,

DVardysShadow

AAD1975 wrote: »

The scenario that you paint is one tailor-made for bridging finance from a lender such as ******. A bridging finance lender would typically seek to advance funds secured against property (in this case one or both of the unencumbered flats) with repayment of the loan coming from the sale of the current primary residence. Although the interest rates of bridging finance lenders can appear high, it must be remembered that bridging loans typically have no minimum periods, exit or redemption penalties etc. Therefore, as soon as the house is sold, the bridging loan can be repaid immediately,

Are you spamming? Looking at your other post does not dispel the thought.