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Can anyone help with a plan B?
morleymackam
Posts: 88 Forumite
The current situation
We have put a holding fee down on a new build that is due to be complete in April/May. The house is perfect and has been the only suitable one in a couple of years of looking. So we are very determined to go ahead.
We have a property to sell which should be on the market today. We have priced it at the lower end of the estimates to sell quickly. We are very confident of a quick sale on the property and we will move out into a short term rental until the new build is complete.
The problem
Unfortunately we must exchange on the new build by 2nd February. At this point we are asked to put down a 10% deposit. This is in the region of 19k and is too much to risk, even if we could get hold of this money through personal loans etc. We would be commiting to moving in on completion, which is something we can't be sure we can do without a plan B.
Possible solutions
1. Negotiate down the deposit. Is this possible with new builds? We are having surveys done on the property so it is obvious we are serious. We are willing to risk losing that deposit but certainly not £19k.
2. Transform our current home into a Buy-To-Let. The property is worth £130k and would bring in around £500-550pm. Is this a feasable option? Would it affect our current mortgage offer for the new build?
3. Send our house to auction. It would be a definate quick sale but would we lose out massively in terms of value. How much would this cost? Bear in mind it's not a developer's property as it has already been renovated.
4. Help........any other magical ideas?
We are desperate to buy this house but can feel it slipping through our fingers. Any advice would be massively appreciated.
We have put a holding fee down on a new build that is due to be complete in April/May. The house is perfect and has been the only suitable one in a couple of years of looking. So we are very determined to go ahead.
We have a property to sell which should be on the market today. We have priced it at the lower end of the estimates to sell quickly. We are very confident of a quick sale on the property and we will move out into a short term rental until the new build is complete.
The problem
Unfortunately we must exchange on the new build by 2nd February. At this point we are asked to put down a 10% deposit. This is in the region of 19k and is too much to risk, even if we could get hold of this money through personal loans etc. We would be commiting to moving in on completion, which is something we can't be sure we can do without a plan B.
Possible solutions
1. Negotiate down the deposit. Is this possible with new builds? We are having surveys done on the property so it is obvious we are serious. We are willing to risk losing that deposit but certainly not £19k.
2. Transform our current home into a Buy-To-Let. The property is worth £130k and would bring in around £500-550pm. Is this a feasable option? Would it affect our current mortgage offer for the new build?
3. Send our house to auction. It would be a definate quick sale but would we lose out massively in terms of value. How much would this cost? Bear in mind it's not a developer's property as it has already been renovated.
4. Help........any other magical ideas?
We are desperate to buy this house but can feel it slipping through our fingers. Any advice would be massively appreciated.
0
Comments
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That seems a very quick date to exchange by, are you sure?
They will often ask for exchange of contracts 28 days from receipt of draft paperwork.
When did you agree to buy?0 -
We have just bought a new build, with exchange of contracts in 28 days, we could not do this, but builder was happy to extend date, ask, as long as you are keen I'm sure they will help.Always on the hunt for a bargain0
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2nd February is 28 days from us putting down our holding fee.
The builder is barratt so i'm not sure about them moving the date. Can't see them being as flexible as a smaller builder. Out of interest how far back did you get the exchange date moved?0 -
based on your figures I would imagine you could get a BTL mortgage of around £100k on your current property, this would leave you with another £30k of equity to find, is this possible? This wouldn't impact on your new mortgage.
The plan B would be to stay in your current property and rent out your new one, just until your current property sells.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
I negotoiated a 5% deposit with Barratts (on £238,500) so it is possible.
I put down my holding deposit on the day after I accepted an offer (3rd Nov) and didn't exchange till 12 Dec, completed on 14th Dec; so that's six weeks from holding deposit to exchange. The sales negotiator at Barratts was like a terrier, I think my EA was more worried about her calls than mine!0 -
silvercar wrote:based on your figures I would imagine you could get a BTL mortgage of around £100k on your current property, this would leave you with another £30k of equity to find, is this possible? This wouldn't impact on your new mortgage.
The plan B would be to stay in your current property and rent out your new one, just until your current property sells.
I'd really struggle to let out our brand new house. Our current property has around 45k equity in it so I guess we could lump a bit more on the new build mortgage until it sells.0 -
silvercar wrote:based on your figures I would imagine you could get a BTL mortgage of around £100k on your current property, this would leave you with another £30k of equity to find, is this possible? This wouldn't impact on your new mortgage.
The plan B would be to stay in your current property and rent out your new one, just until your current property sells.
I'd really struggle to let out our brand new house. Our current property has around 45k equity in it so I guess we could lump a bit more on the new build mortgage until it sells.0 -
rosysparkle wrote:I negotoiated a 5% deposit with Barratts (on £238,500) so it is possible.
I put down my holding deposit on the day after I accepted an offer (3rd Nov) and didn't exchange till 12 Dec, completed on 14th Dec; so that's six weeks from holding deposit to exchange. The sales negotiator at Barratts was like a terrier, I think my EA was more worried about her calls than mine!
Was this negotiated before or after you put down the holding fee? Did you have a plan of action for if your sale fell through? Thanks for your help.0 -
Bumpety Bump
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Just a quick addition that I dont believe that selling the old house at auction would help, as it would need to be listed, and then after the day of the sale the new owner has 28 days to complete, which wouldn't help you out, so you may as well go traditional methods.Debt £5600 all 0%0
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