Best way to be chain free / BTL option?

Bestthingsinlifearefree

Hi,I have found a house we really want to offer on (price circa 150K). However I want to avoid being in a chain situation. i.e I want to proceed with the purchase of the new house while putting up my house for sale but I want to buy the new house irrespective of whether my current property has sold.What is the best method do to this? I have a 25% deposit I can put down on the new house (without using the equity in my current house). Once I have sold my current house I would then use the equity in that to pay down the mortgage in the new house.Could I use a BTL ?? mortgage to buy the new house and then redeem it once my current house has sold. I really want to avoid the hassle / uncertainty of a chain situation.Any ideas / comments much appreciated.

Thrugelmir

A lender would view this as a bridging loan and charge you accordingly.

Why have the expense of 2 homes? Less stress to be in a chain........

Bestthingsinlifearefree

Thrugelmir wrote: »

A lender would view this as a bridging loan and charge you accordingly.

Why have the expense of 2 homes? Less stress to be in a chain........

Thanks for the reply. I want to avoid a chain, as the house we want to offer on is chain free and I don't want to miss out on it and yes there would be an over lap for a couple of months while running two houses but this will allow me to move in an orderly way, get the new house sorted before we move in etc. The extra cost is worth it for me for the certainty of being chain free etc.On my current house I have a 1.4% BofE tracker (no redemption penalties) with ING (and about 50% equity)would they give me a bridging loan type scenario ?? I guess I should phone them?Are bridging loans expensive???
Is the "BTL" route not an option?

Bestthingsinlifearefree

( Once I have all the equity from my current house circa 85K + savings circa 40K (using every penny), with new house costing 150K it would leave me with a 25K mortgage which I should be able to clear in 2 years and be mortgage free.So I am not seeking big funds just the way to facilitate a move chain / pain free to ensure I get the house I really want to offer on and in the fastest time etc (need to put school catchment forms in in October etc).

Thrugelmir

As a guide 2% to 3% above base rate. Plus a fee .5% to 1.5% of the advance.

You would need to demonstrate that you are actively marketing your existing property.

Have you considered that your existing property may not sell very quickly?

BTL wouldn't be a very cost effective option, for a number of reasons, and you wouldn't be protected as you are with a residential mortgage. As BTL is actually an unregulated commercial loan. You would need to demonstrate the rental value of the house in order to substantiate the amount you wished to borrow.

Bestthingsinlifearefree

Hi Thurugelmir,My thought process was to use a BTL mortgage then move in there once I have sold my current property and redeem virtually all the mortgage on the new property.2% /3% above BofE / 1% fee etc I could live with. Yes there is a risk I would not sell my current property. I bought it in 2003 for 165K and would be looking for 175K now (not made any improvements on it). It could well go for more but I have based my maths on 175K.Do you think ING do bridging loans. What if ING Don't?Sorry to pick your brains to much.All imput welcome (particuarly as I looking to offer the house in the morning !! / plus wife is keen on it / school catchment right for the little one........etc etc cue violins.....

Bestthingsinlifearefree

By the way I do usually use paragraphs / sentence spaces when I write but when I post on MSE, even if I edit it, it always squashes all the text up for some reason???

Thrugelmir

You can do little more than ask. Every lender weighs up each case on its merits, your circumstances and its own lending criteria.

Often lenders are cautious where its a case of someone wishing to buy before they sell. As much for your own protection.

From my perspective if you are willing to pay extra money to fund 2 mortgages etc. Why not price your property very competitively to sell it quickly. Once the election is over markets could react quickly to the outcome. Fiscal tightening could put a dampner on house prices, and within a couple of months quite possibly base rate could be up by .5%.

Very difficult to see an upside at the moment.

Bestthingsinlifearefree

I think I will call ING to see what they say. I guess from a risk perspective I would be running with 90K mortgage on currrent property and 120K mortgage on new property. So a 210K bridge mortgage and the bank having circa 120K equity (33% or so?) in the properties.I am going to market my current price competively, hence 175K for a property bought for 165K 7 years ago. Hopefully that is realisitic.Thanks for your input Thrugelmir it has helped me to focuss / clarify my thoughts.