How do we do up a property and live in another?

marmitequeen

So, a property in our favoured road has come up and it needs extensive work, which we are very excited about (have done almost as much before). We won't be able to live in the house whilst this is happening (to be honest, wouldn't want to live in house now - it's a very sad story of an old man).

Rough calculations suggested we could get a mortgage on 85% to buy the house (including stamp duty, fees etc) and get the bulk of the work done (extension, electrics, windows, boiler, kitchen, bathroom, so not much then) whilst still living in our current house. We'd then move in and sell our current house, using that to blat the mortgage down. We could do the higher payments for about 18 months.

We own our current house outright (scrimping and saving and buying at the right time) so there's no mortgage on that.

We've been saving for our dream house for years (still paying our 'mortgage payments' into a special account).

The money looks ok but just phoned the bank and they won't lend on the new house if it's not going to be our main residence. I've explained it will be once it's habitable but it was end of conversation. We thought about re-mortgaging this one but it won't come to enough.

Any thoughts? I guess that a broker will find us a mortgage company who will consider this otherwise how do people do it? I am aware we sound greedy and that we want it all when so many others are struggling and I'm sorry about that but I'd appreciate any advice. If anyone can recommend a broker in Surrey area that'd be fab!

many thanks
MQ
x

Thrugelmir

Is the property habitable?

marmitequeen

Haven't seen it yet as it 'needs a clean' according to estate agent (and we want to see if we can afford it before getting excited). However it needs pretty much everything doing to it but someone was living in it until very recently.

I'd say it's theoretically habitable at the moment. It won't be if we have the work agent says is needed doing to it. Does that help? It'll be without electrics/kitchen/bathroom/boiler for some point.

armour

Sell your current house & rent a place for six mths near your new place.

Trying_to_be_good

My sister is doing this at the moment with Nationwide, do should be OK if you have the deposit for the new place - not living there whilst you do it up shouldn't be an issue, it WILL BE your main residence. It does leave you very exposed (owning two houses in the short-term) to the residential property market should it crash in a big way.

Good luck - exciting plan!

Marie27lol

Howdi Marmitequeen

We were in a similar situ last summer. Orig house all paid for, and we had the deposit for the new home saved already (not based on the sale of the old un).

We didnt move in for 7 weeks, but the house was habitable upon survey. Cold, drafty and ugly, but liveable in.

We then moved into the new-un, and done up the old-un ready for renting.

Good luck.
M

marmitequeen

Trying to be good and Marie27lol: thanks for encouragement. It's good to know we're not totally crazy. We want to get all the facts established before we view the inside of the property so we don't get totally drawn in with the emotional side of things. I've found a broker via my union who can do an initial phone call on Monday so I'm hoping that she'll get us a mortgage in principle. We'll be up against developers who do this all the time so we need to be in as strong a position as possible if we want to go ahead.

I know it sounds like we've decided before seeing inside but we have viewed houses in this road before so know the basics of what is on offer and we're just expecting the worst in terms of condition. The others have all been extended in the way we'd hope to do so there is precedent and we have ideas about how it can be done.

Amour: we don't want to sell this and rent as (a) it'll put us into a chain therefore make us less attractive as buyers and (b) cost more money (the 6 months rent could be a bathroom!!) and (c) involve moving twice. We really do want to have our cake and eat it!!

We also called HSBC yesterday as they appeared in lots of best buy tables and the guy on the phone said they would certainly consider it, it's just they'd class it as a 2nd home mortgage. What exactly this means I'm not sure as they can't offer a face to face for 2 weeks, but he was really helpful in explaining some of the details we need to have available.

Now it's just gather facts and do all those sums again and again and again. Any other stories of inspiration or words of advice most welcome!

Thrugelmir

marmitequeen wrote: »

We could do the higher payments for about 18 months.

If you are mortgage free what's the issue with doing it for longer.

May take some time to sell your existing property.

marmitequeen

Thrugelmir wrote: »

If you are mortgage free what's the issue with doing it for longer.

May take some time to sell your existing property.

We can take longer and will see what happens, but we'd prefer to get back to mortgage free ASAP. Using this house to go towards that if our preferred option at the moment. We totally understand everything might crash, in which case we'd rent it out, but over the past few years houses that are priced sensibly (ie not top whack) go pretty quickly. Good point though, we need to do the sums as if we can't sell and have to rent it out. And then as if we can't do either. However, we don't want to be so cautious we stagnate as that's not particularly healthy either. At some point we have to do something that incurs risk. It's about minimising that risk - making sure we have established the facts and thought about what we are doing.

We have been looking for a project like this for about 2 years and saving up for it. This is the first time it looks like it could be possible.

However, I could still walk into the house next weekend and say 'no way'!!