Are we dependant on selling in order to buy?

Kynthia

Apologies if this subject has been covered before. We are looking to buy a house near my family and move in before spring due to having a baby. I'd rather complete before I'm too near my due date. Now we are in a good financial position with a 25% deposit, secure salaries, no debts and very good credit histories. You might be wondering what the issue is? Well we're having a nightmare selling the SO flat we live in and the issue won't be resolved until at least the summer, but we really don't want to wait. We do have a cash buyer who would buy it now, but we worry the housing association would be slow and difficult meaning this sale could hold up our purchase. Also we are having to compete with other buyers at the moment, so saying we are virtually chain free would be a bonus (not lying, actually telling them we're not reliant on the sale for our purchase) and strengthen our bidding position.

So my question is would we be able to complete on a house purchase before completing the sale of the flat? Our deposit is not tied up in the flat. We've looked into letting it and we could get rent of 125% of the mortgage/rent, so there's no risk of us not being able to afford our house if the flat sale fell through. I've been a landlord before and know what to do. We're also not borrowing our maximum, only three times our salaries, so I'm hoping affordability wouldn't worry them too much either. I'm risk adverse and know we would be fine even if things were delayed or went wrong, but will our lender think the same?

Does it depend on the lender as I'm liking Chelsea and Yorkshire building Society's having used a comparison site, but nothing's decided. Also do I need to tell them I'm pregnant as I won't be going on maternity leave until Feb and I get full pay for months.

Thanks for your help.

sharingiscaring_2

We are in a similar position to you. Lender said it's fine to have both properties and two mortgages if affordability is okay, but LTV has to be a minimum of 85%. You have 75% so you shouldn't have a problem. We only had 90% so we are stuck in a chain.

Out of interest, what are the issues you're having with your SO property? Why won't they be resolved until the summer?

Kynthia

Thanks for your comments. Works need doing to the block and two buyers have had their mortgage lenders refuse to exchange, however the current one is prepared to wait. This problem is nearly 15 months on-going, I have zero confidence in the HA who have proved beyond incompetent, there's no evidence that works are soon to commence and it wouldn't surprise me if things continue for much longer than estimated. I'm not prepared to wait any more.

So would I tell the lender we're letting or selling with letting as a back up? Would it be better to have a broker or could I deal with the lender direct?

StuC75

Have you tried speaking to the intended lender, only they would know with your financial circumstances what they would lend to..

sharingiscaring_2

It depends whether the HA will allow you to let it out. Don't most SO leases strictly forbid this? If yours has made an exception, you'll need the consent to let evidence from existing lender to show your new lender. Otherwise tell them you are awaiting exchange/completion.

This is all based on our own dilemma! We couldn't let it out but wanted to keep it. We went direct to Nationwide and they told us it would be fine based on our affordability, but not on our low LTV. Their min is 85%.