Buying a new build/current property

beckypartridgeleeds82

Hello everyone. I am new to this forum and this is my first post and I need some help.

We are wanting to buy a new build but the builder is needing us to be proceedable. Which means either renting our current property or having sold it and exchanged contracts.

The problem this is causing is that they won't let us even reserve one unless we are proceedable. But for us to be able to either rent or sell we would need to carry out some cosmetic work. But as these houses are going fast (according to them), we have to do this within the next month.

After doing some research, it seems we maybe able to change our current mortgage to a consent to let, get the new mortgage, and reserve the new one. So although we will have consent to let, we would still live in this house until the new one is ready in dec. During this time we will carry out the work necessary and will aim to sell it and complete at the same time as the new one. If it doesnt sell, we would still be able to cover both mortgages.

If this is possible, what do I need to do to change the mortgage? So do I just get an evaluation for it? Would we still need to meet certain criteria for letting even though we won't be letting or registering with an agancy?

Sorry for the long post but if anyone can help that would be great.

Thank you in advance

Becky

bclark

As long as the figures work so that you can afford it And the lender is happy then it will work.

The builder just needs to know you are proceedable, this means you must be under offer (you don't need to have exchanged), or that you have the funds to buy without selling. They will expect you to exchange contracts on the new purchase within 28 days or so of reserving.

kingstreet

beckypartridgeleeds82 wrote: »

what do I need to do to change the mortgage?

Call your lender and ask for its consent to let requirements.

Then, as this will be a second property, you can't use HTB - Equity Loan and will need at least 15% deposit for a lender willing to lend on a newbuild and ignore your let property and mortgage without deducting the cost from your income.

harrys_dad

If you buy the new house and let out your old house you are starting a business, and need to be prepared for that. There are all sorts of issues about becoming a landlord and it is not to be entered into lightly.

It seems to me that a more cautious and advisable strategy would be to put your house on the market (either before or after completing the work depending on what it is and the effect on price), and when it is under offer look for a new house.

What is the attraction of the new house? Surely there will be others to choose from in a few months time. Is it really worth overcommitting yourselves financially to make sure you get it?

beckypartridgeleeds82

Thank you for the replies. We would still be living in the house we are in at the moment unil the build is complete which is not until December. So we will not be letting it out unless we haven't sold it when we complete on the new property. If we can't have the help to buy for the new property, would we still not qualify for the new buy scheme? The reason we want this house is because it is exactly where we want to live and is in a desireable area so they are are already selling fast even though they've only just started building. So if we wait 3-4 months until the work on our current house is done, there may not be any left of the houses we want as there are only 3 left at the moment.

kingstreet

beckypartridgeleeds82 wrote: »

Thank you for the replies. We would still be living in the house we are in at the moment unil the build is complete which is not until December. So we will not be letting it out unless we haven't sold it when we complete on the new property. If we can't have the help to buy for the new property, would we still not qualify for the new buy scheme? The reason we want this house is because it is exactly where we want to live and is in a desireable area so they are are already selling fast even though they've only just started building. So if we wait 3-4 months until the work on our current house is done, there may not be any left of the houses we want as there are only 3 left at the moment.

AFAIK all the schemes available on newbuilds are for single property only and you have to sell yours on or before completion of the new one.

beckypartridgeleeds82

They have said that we can have a consent to let or buy to let as long as we can get the second mortgage and pay the deposit. I am so confused :-S

kingstreet

What are you confused about?

Of course you have to be able to get the new mortgage for the new property. That goes without saying.

All you wanted to know is if they would consider consent to let, which they will and the terms they will apply, which I assume you also found out.

Are those terms acceptable/possible?

Now, you need to piece together the deposit and mortgage for the purchase.

beckypartridgeleeds82

Maybe I am not wording it right but I have gained some useful information so thank you. I think my question now is, do the bank just change your mortgage upon application or do you have to adhere to cetain letting regulations and have checks done etc? Or are the checks done when you register with an agency. As I mentioned, until we move into the new house it wouldn't actually be let. Do you need to have to have a specific LTV to be able to change or is that just for BTL? Our mortgage is for £95k and we have £80k left to pay. We haven't had our house valued yet but according to Zoopla it is worth around £88k. We do have the 5% deposit for the new build along with another £3k savings. I am sorry I seem confused as I am just getting my head around everything at the moment.

charleyroo

So assuming Zoopla is the exact, reliable valuation that we all know it is, you have 8k equity as well as a 5% deposit or is the equity your deposit? The savings might cover your estate agent fee and part of your stamp duty but you still need another couple of grand for legal fees and the rest.

So for htb you will have to have an offer accepted on your current property, or if you let it out you will need at least 15% deposit ready to go on the new house, plus legal fees and stamp duty because you can't keep your place and have HTB.

G_M

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