Is our dream home possible?

northerntwo1

Evening all - Lurker but never poster so know how much knowledge there is on here and am hoping I can be helped.

Our dream home has came on the market and we have viewed tonight and fell in love instantly. Now we will place our current home for sale but there is a lot of interest in this home and need to know if somethings are likely to be acheiveable.

Value of new home is £325 (needs modernisation approx £20,000 worth maybe more depending), but that would be the minimum and we can add as we go. Example that would be a cheap bathroom and we can change in 12 months.

Current home has value of £300 but not yet up for sale.

Applicant 1 - income £70K basic but P60's for last 5 years all have earnings of £100 - £120 as commission is paid.
Applicant 2 - income of £34K

Current mortgage is £73. Savings (to hand within 2 months) are approx £85-95K

My question is this, is there anyway we can get a second mortage or a new mortgage for the house if we can't sell our current home?

I am very excited tonight but want to be realistic as the owners won't wait until our current home is sold unless it sells very quickly.

Is this 2nd mortgage realistic given the collateral in the current home?

Dave_Ham

Ok - I have had many, many clients recently in a similar quandry..

My reaction would be to raise a mortgage on your property as a let to buy, thus supporting the deposit on the new property then get a new residential mortgage and move in. This is the simplest and quickest way.

There is potential that your existing lender may offer you a consent to let or permission to let and therefore you can take a new residential mortgage on this proposition basis.

Both are potentially achievable although not something to take on without due consideration.

Suggest you book an appointment with a broker asap if this property will go quick.

Being chain free on this sort of property value, will make you immediately more attractive.

Give the Estate Agents brokers the swerve if they see how exicted you are and try any tricks. They are not usually the most experienced - spend 10 minutes searching on here...

Good luck

northerntwo1

Many thanks indeed. I don't wish to rent out my current home though, if possible I would like to live there for the duration of the "doing up" as have young children.

Is there anyway they would consider a mortgage without letting out my current home. Ie would they consider the commission from 5 years of P60's?

Our current lenders are First Direct (Offset Mortgage) if this makes a difference.

The_J

This should be pretty easy. Dave explains the options well.

Whoa...First Direct....damn, spoke too soon.

I wouldn't necessarily mention that you intend to live at the previous property. I would apply on the assumption you will live there from day 1 and if that doesn't happen then hey ho. Your salaries will cover both mortgages easily.

Dave_Ham

If you can gertr consent to let (whether you rent or not is not really relevant) but what is, is that the lender on the new mortgage will disregard this credit commitment and therefore you should achieve the mortgage in a relative straightforward manner.

Do not approach First Direct with this as they are unlikely to accept such a proposal and you do not want to jeopardise the bigger picture...

Good luck

northerntwo1

Sorry I genuinely don't understand about not approaching First Direct? Is this for the second mortgage? I would have to tell them at some point. Why are they so bad, we have never had an issue with them at all.

I used a FA previously who are attached to an estate agent (not the one that is currently listing the house though). They are a FA who now own an estate agency which their son runs. Would they be OK or do I avoid all FA who are attached to estate agents?

Very sorry for these questions and my inability to comprehend but I am a not used to this at all.

Dave_Ham

First Direct are a great lender, no doubt. Unfortunately they only accept the most conforming of situations which yours probably was with a simple house purchase or remortgage to them.

Now you are effectively trying to "afford" 2 homes given their policy criteria and approach to lending, my opinion is they will not like this.

You absolutely need a broker, although the Estate Agents advisors are usually rubbish there are always exceptions and the smaller, more independent they are the better they tend to be.

Have a free chat with the one you are comfortable with, get their proposed solution and costs (do not let them credit score) and then put the solution on here - we will soon tell if they are any good or not.

My approach would be to call First Direct and ask generally what their approach to "consent to let" is and will they load rates and by how much.

Depending upon the answer, determines the way forward.

Good luck

The_J

I have never seen First Direct accept a request for consent to let. That's the problem.

For the new mortgage you would want the FD mortgage to be a "second home". You don't need to speak to FD at all. The new mortgage will have to be with someone who will lend enough based on your incomes.

Dave_Ham

The_J wrote: »

I have never seen First Direct accept a request for consent to let. That's the problem.

For the new mortgage you would want the FD mortgage to be a "second home". You don't need to speak to FD at all. The new mortgage will have to be with someone who will lend enough based on your incomes.

Just re-read and spotted incomes in first post, J is correct; do not approach First Direct in this instance as both mortgages are affordable..

Good luck

northerntwo1

Evening all

Firstly many thanks for your excellent advice. The broker suggested a simple 2nd mortgage and we received some initial responses. We decided to go with Nationwide as they have a flexible mortgage but sadly 3 days later the house was sold to a cash buyer.

So it is back to the drawing board, we do love this street but houses are few and far between. The only major suprise for us was the valuation of our current home. Next door sold a month ago for £285 but needed work. Our home has an extention of 3 additional rooms, (2 bedrooms 1 incliding a dressing room and an ensuite) plus 4m extention to the ground floor, downstairs facilities, a utility room and very large conservatory. They valued it at £295 only (which means £280-£290 max) and when we questioned it they said we had gone above the ceiling limit.

Did not instill confidence in the IFA as it was their Estate agency who valued it and I firmly believe they wanted a quick sale and were intending to take advantage of our need to sell quickly. Somewhat made me loose confidence in the IFA.

Anyway - Many thanks again for your advice and if I need more I will be looking especially since my fixed deal ends this month and go to SVR.