Chain might sort of collapse - opinions on options please!

teh_schmerm

Hi, we're sort of in the process of moving but it might all be going a bit wrong.

It might all fall through, and my mind races overtime trying to figure out how to avoid this. I have a vague idea and could use some advice on it. I'm guessing the advice is 'thats a bad idea, don't do that', but I figure there's no harm in voicing it on this forum in the hope of getting some knowledgeable real-world experienced answers. People who know more about this sort of thing might know that it is not even possible.

So...
Here are the things that we know reliably (from our solicitor) and things which we believe to be misinformation (from estate agents...).

The facts:

• We own our current property (with a mortgage on it), we are selling it.
• We are supposed to be buying a house using a new mortgage, savings, and equity built up in our property which we would get from selling it. The house is through an estate agent.
• Somebody is supposed to be buying our property.
• It has been about 3 months since our offer on the house was accepted, we have done everything up to but not including exchanging contracts.
• Our solicitor has confirmed that the purchaser of our property hasn't progressed anything, no searches, no nothing.

And the mysteries and misinformations...

1. We believe that the purchaser of our property is stalling for reasons unknown. Speculation is rife but our belief is that they want to pull out but do not wish to own up to this.
2. The estate agent keeps ringing up saying that the vendor of the house we wish to buy is getting frustrated that things are taking so long and will want to put the house back on the market to get a quicker buyer.

Now, I believe point number 2 above is best explained by the fact that the estate agents just want their commission, and that this is their scare tactic to try and get things moving - rather than using a friendlier 'lets all work together' approach. Having bought our current property, and based on anecdotal evidence, house buying moves at a fairly sedate pace.

Point 1 is quite the unknown, we've tried chasing the purchaser up but fail to get a definitive answer.

Here is my idea:
With our current property, and our current mortgage, we have overpaid and are entitled to take payment 'holidays' based on this overpayment.

At a stretch, I believe we could cover the missing equity from the sale of our property, and purchase the house anyway. Say we do this, then I know we could cover the repayments on both mortgages for some time - even after the repayment holiday period. I have budgets and spreadsheets that prove this projected into the future based on our previous monthly earnings/expenditures/overpayments/savings.

Can I just use the second mortgage without paying off the first, or will there be some small print saying that I have to pay off the old mortgage with the new one?

If short on the purchase price because of the equity being tied up in our property, should I use a bridging loan? Or should these be avoided like the plague?

In short, can I just buy the new house anyway, and put our property back on the market? I know this would be risky, but I'd be confident that our property would sell for the required amount based on location & having kept abreast of the market in the area.

So, in summation:
Can I just buy the new house?
If so should I not do it if I have to use a bridging loan?
Would it be very stupid, or stupid enough to warrant not doing it?


Thats a lot to read, I've tried to be as concise as I can. For a closing statement I'll say that I know I'm too emotionally attached to the problem. Like I've seen noob people overbid crazily on ebay 'cause they get all het up wanting to win something. Rationally if it falls through and we have to walk away we lose our solicitors fees thus far, which would be annoying. If I tried out the plan as outlined above we could obviously lose a lot more money, if not everything if the markets went particularly sour.

Anyway, thanks for reading if you made it this far! If you have any knowledge or input you'd be willing to share then I would be immensely grateful!

kingstreet

teh_schmerm wrote: »

Can I just use the second mortgage without paying off the first, or will there be some small print saying that I have to pay off the old mortgage with the new one?

You need to read your mortgage offer. I would be very surprised if it is not predicated on you paying off the current mortgage and/or selling the current property.

A lender will normally have to re-underwrite the application to ensure continued affordability with two mortgages to cover. If you then include bridging finance in the equation, you're adding another complication to the mix.

I suggest you ask your lender/adviser what is likely to be the outcome of trying to make such an alteration to the application.

teh_schmerm

Thanks, I did think this would be the case. Do you know the kind of terminology I should look for in the offer?

In writing my initial post I think I've talked myself out of it now, or talked some sense into myself at least. I'm still curious to know if it can be done though.

kingstreet

Abbey/Santander wording where a mortgage has to be repaid;-

Your existing mortgage on your current property which is being sold in a connected sale must be redeemed on or before completion.

Halifax wording for a mortgage allowed to continue;-

Except where such a mortgage is an outstanding credit commitment you have declared an intention to repay, we agree that any existing mortgage you have on any other property does not have to be repaid when you take out this mortgage.

go_cat

Problem with buying without selling original house is what if it takes years to sell, how long could you afford a bridging loan..

If you are selling your house via an EA then get them to chase the buyer and issue an ultimatum exchange by x date or you will pull out- EA will want their commission so should be eager to push your buyer along

Fire_Fox

Sounds more likely your buyer doesn't have funds in place, it's easy to pull out of a purchase if that is your wish. If your buyer has done neither survey nor searches to all intents and purposes you don't have a buyer. Why aren't you putting your house back onto the market? Why are you so desperate for the new house?

How long can you pay for two mortgages if: you fall ill or injured and cannot work, the female half of your partnership has a nightmare pregnancy and a sick baby and cannot work, someone trashes the empty house removing all the copper wiring so it becomes unmortgageable?

hazyjo

Wouldn't touch a bridging loan unless desperate - and only for days/week or so, certainly not for months or indefinitely. High rates, etc.

What has your buyer done exactly? Are solicitors actually instructed? Have they had a survey/valuation done?

You have to face the fact that if they've not even paid the solicitor for searches, they're not committed to buying the property.

How are your solicitors getting information from them? Via their solicitor, your EA, direct?

I think the time's come to start setting a deadline - and put it back on the market. Yes, you risk losing the house you're buying, but if you're that far down the line, they might agree to hang on for you for a while.

Best thing I would suggest would be to talk to the vendors direct and say you're very frustrated and that you're thinking of setting a deadline but don't want to lose the house. See if you can all reach some sort of compromise. They'll not know what's going on and will be getting increasingly frustrated. I'd probably be making threats if I were in their shoes too.

A lot of us have been in this boat. Unfortunately, including myself!

Good luck.

Jx

delmar39

I was in a similar position a while back and as you say one tends to get emotional about these things. It's great that you're doing everything you can to close the deal, but realistically it's a case of selling yours and buying only when you've sold.

If your buyer has progressed nothing, why not suggest to your solicitor that you'll be putting it back on the market whilst they make up their mind. Might backfire, but if they're not progressing what have you got to lose.

No easy way, it's all part of the nightmare that is buying and selling houses!

Conrad

OP - your'e the one needing to be critiscised not the agent who is rightly acting in his vendors best interests. Who the heck leaves it 3 months before bothering to notice thier buyer was a fantom. Your'e property should have been valued by your buyers lender within a week or so, and then conformation the offer was made shortly after.

You need a rocket up your botty I'm afraid.

DRP

Conrad wrote: »

OP - your'e the one needing to be critiscised not the agent who is rightly acting in his vendors best interests. Who the heck leaves it 3 months before bothering to notice thier buyer was a fantom. Your'e property should have been valued by your buyers lender within a week or so, and then conformation the offer was made shortly after.

You need a rocket up your botty I'm afraid.

Yes i think I have to agree with the above!

teh_schmerm wrote: »

//snip

• Somebody is supposed to be buying our property.
• It has been about 3 months since our offer on the house was accepted, we have done everything up to but not including exchanging contracts.
• Our solicitor has confirmed that the purchaser of our property hasn't progressed anything, no searches, no nothing.

//snip

teh_schmerm

DRP - thanks for playing Richard 'The Hamster' (he's not even a real hamster, is he?) Hammond to Conrads Clarkson.:(

Helpful people:
hazyjo - this is what I thought would be the case about bridging loans, I freely admit I know nothing about them really. Kind of like the 'Wonga' of mortgages or something?

We know that our alleged purchaser does have solicitors, as our solicitor has been in touch with them, and our property has been surveyed.

Delmar39/Fire Fox/go cat:
Thanks for your points of reason. I'm totally off the whole bridging/two mortgaging thing now. Looks like I'll have to get busy with the ultimatums and look at finding an estate agent for our current property. Then cross everything and hope for the best.

I think we're kind of resigned to it falling through now, so anything better than that will be a result.:cool: