Remortgage Or Loan??? Advice needed please

Denver235

can anyone offer any advice on the following situation.

We have a mortgage on our current house which we are trying to sell. We have a buyer for it but they are trying to sell there property so for the time being we are at a bit of a stand still. We don't want to miss out on the property/ land we want to buy so we are going ahead with the purchase. We can borrow enough to get another mortgage BUT the property we want has been deemed un mortgageable by the lender - this doesn't concern us as we only really want it for the land.
Just to put you in the picture the house we want is less money than the one we live in so once we sell our current home we would be mortgage free. We intent to live in the exsisting house whilst we build our 'dream house' on the land and then knock the original one down.

We are currently only on an interest only mortgage and have been paying a chunk off the capital each year. We aren't in a fixed period. We basically need £26,500 more money to buy this house/ plot so we want to know if we would be better getting a loan or remortgaging?

If we get a loan we are thinking of getting it over 10 years but paying it off as soon as our house sells - obviously there are some redemption fees but think this is only 2 months interest?? In this instance we would also be able to take a payment break on our urgent mortgage of up to 6 months - and hopefully by this point our house will be sold. If it's not sold then we'll be no worse off as the combined mortgage and loan amount won't be much different the the amount we'd be paying if we remortgage.

If we re-mortgage we'll be fixed in and will have higher repayments and the early repayment charges will be more also.

Anyone got any thoughts or opinions on which way to go???

Many thanks

Annisele

Are you certain you can't take a mortgage against the new property?

I know you say it's unmortgageable - but there are lenders that specialise in self builds, and (assuming you have planning permission etc) you might be able to borrow against the land despite the state of the existing house.

If your current house doesn't sell soon, how will you fund the development costs of the new property? Or are you just planning to wait until it does sell before you start?

Denver235

Hi, thanks for your comments.

In order to get a self build mortgage we need to apply for actual planning permission and as it stands we only have this agreed in principle as the house isn't officially ours yet. We've spoken to mortgage advisors and they all say the same thing So although we've only approached a couple of lenders it looks as though they'll all say the same thing.

We would need to wait until our property sold before we could start the build. We aren't in any rush to start we just want to ensure we actually get it.

Thank you

Let_Us_See

Could you confirm why lender considers proposed purchase is unmortgageable?

Denver235

Hi,

Basically the property is an asbestos pre fab. She to this they say it's unmortgageable.

Thanks

Let_Us_See

Yep, I would probably agree.