On what basis can we get a mortgage?

Wobblydeb

Me and the fiance are renting at the moment, whilst preparing his flat for sale.

However, the perfect house has just come on the market. Ideally we would get a mortgage and buy in joint names.

Are there any lenders that will give us a joint mortgage whilst awaiting sale of flat? Or perhaps knock off the mortgage payments from the flat and reduce amount loaned accordingly? (I think that might still give us enough).

Thanks for your help

BitterAndTwisted

Wobblydeb wrote: »

Or perhaps knock off the mortgage payments from the flat and reduce amount loaned accordingly? (I think that might still give us enough).

I'm not absolutely clear about what you mean by this.

Joint mortgages are not uncommon and you need to have a serious think about whether you should be "joint-tenants" or "tenants in common" with regard to the ownership. A solicitor will be able to advise you on the difference between the two and the possible repercussions should the relationship fail long-term.

The amount a lender will commit to lend is based on your total income and assets. Under normal circumstances the release of equity in the property already mortgaged could be used towards a deposit for the new property. If you're looking to take on another mortgage in addition to the one your fiance already has you with both need around 20% as a cash deposit and earn enough between you to be able to afford both mortgages. They will also be looking at your total indebtedness re loans and/or other credit a that will afect what they might be prepared to lend.

My sensible head is telling me that you should get a buyer for the flat before you start thinking about committing yourselves to buying another property.

VJ_

BitterAndTwisted wrote: »

My sensible head is telling me that you should get a buyer for the flat before you start thinking about committing yourselves to buying another property.

Or take it off the market and put it up for letting; once you've got a tenant covering it's mortgage (and probably giving you a bit of extra income), the flat becomes an asset rather than a liability.

BitterAndTwisted

This could mean that the OP's fiance may need to convert that mortgage to a Buy-To-Let one and lenders often require a decent amount of equity and that the achievable rent will be 125% of the mortgage payments. Furthermore there are income-tax implications which they may not relish.

All of the usual legal obligations and the possible risks involved in becoming a landlord and running a business may not necessarily make this project an attractive proposition. A sensible landlord would also have a decent amount set aside as a contingency for if things go wrong. It's not something I'd go into lightly and possibly risk the roof over my own head in the process.

Wobblydeb

BitterAndTwisted wrote: »

My sensible head is telling me that you should get a buyer for the flat before you start thinking about committing yourselves to buying another property.

Perhaps a bit more background might help:

Monthly income c£5k
Rental property monthly cost (Rent + bills) c£1.6k
Owned flat monthly cost (Mortgage + bills) £800 (which includes an element of overpayment)

If I get the timing right, we just swap the rental property costs for the new house.

The biggest risk is if either of us lose our job. In that situation it would be time to get tenants in! I have been a landlady in the past, and no, I don't fancy it as a proposition!