Advice on buying new property

Codename8778_2

Hey,

I'm posting this deal on behalf of my parents who are currently looking into movingn house. This is quite a complicated scenario with alot of factors to consider, so we could really do with getting some advice on the best course of action.

They currently own a house, with 18 months left of their mortgage. House is valued at around 120k, with 3.5k outstanding in the mortgage (so they are close to owning it outright).

They have found a property that they really like, offers around 75k, requiring around 20k worth of renovation (a project that would take 2-3 months to complete). As such they have plenty of equity to covers all these costs outright, however the funds are tied up in their current property. They would also need somewhere to live for 2 months or so while the renovation is completed (so putting their current property on the market straight away maybe risky).

They have a fairly low income, and are around 10 years away from retiring, so may face some difficulty on getting a second mortgage on this property. They also have no deposit whatsoever for this purchase. If required, I am happy to partner with my father for mortgage on second property if it would improve our chances of securing the loan (and there would be no issue with me covering the monthly costs incurred with this mortgage). I also have no funds available for deposit though.

What is the best options available? Ideally some kind of bridge loan would work, however i have heard they are very expensive. Alternatively if we could secure a 100% mortgage on the second property to cover house cost and renovation cost it could work, but that would be wishful thinking. Finally if we could remortgage the current property to release 100k, we could pay cash for new property and renovation cost, then once they move and sell the old property pay it straight off.

Its all very confusing, I'd really appreciate some advice

Thanks

Codename8778_2

I should also mention that the new property, offers around 75k, has a home report saying renovation costs are around 10k (we have doubled this cost as a worst case scenario), and when completed, property value will be around 100k

thriftychap_2

75% BTL mortgage on their current property? make sure it has no settlement fee's.

Doozergirl

Like thrifty chap said. A re-mortgage on their current property with no tie in and no redemption penalties. They all have fees attached.

Need to speak to a broker about how they prove income.

codename8778

Is there any way that i can help out at all? I.e if their income isnt good enough for 75% remortgage can i join in on the application and add my income to the pot? I have a mortgage of my own, but have enough expendable cash to cover the costs of the remortgage until the property is finally sold