Seen dream house, old flat about to go on market - deposit needed advice please?

Pippilongstocking

Hello!
Thanks for reading.

So - we need advice on how to or (whether to) try and find a deposit for buying a new house whilst we've the 'old house' almost ready to go on the market.

Some details.

We live in Scotland - not sure if that matters.

The old house (flat) has c19k left on the mortgage - approximate value on the market at current rates of flats of a similar size £80-90k in our area.

Current flat needs some work (new boiler and some tidying up) to get it on the market which is picking up. Hoping in real terms to have it on market in couple months, max.

Found a house today for £240k which is lovely great home report and sellers have bought somewhere else already (and moved out), lots of interest in property, and the house is ready to move into nowt needs doing.

So how is the best way forward to secure a short term fix to find the deposit?

Any suggestions - we're seeing a financial advisor/mortgage specialist this week.

Current mortgage is repayment taken over 25 years with only 10 years left on this mortgage.

OH's credit rating is excellent and has been offered more than the value of the new house should he reapply for a mortgage, but its finding the deposit which is an issue, in the short term.

Not keen really on a buy to let as looking to sell this one asap - but would consider. Happy to remortgage if an option in short term to free up deposit.

Any suggestions?

I've put a link on here from my dfw diary - thank you very much for anyone reading and any useful advise (even if its don't do it) please, very happy to listen to suggestions.

(NB I've looked down side of sofa and so far not enough found there )

Thrugelmir

Normally the process is to use the deposit received on the current property to part fund the deposit on the property being purchased. Topping up with cash as required.

You'll find it difficult to fund such a transaction without savings of any kind.

Pippilongstocking

Thrugelmir wrote: »

Normally the process is to use the deposit received on the current property to part fund the deposit on the property being purchased. Topping up with cash as required.

You'll find it difficult to fund such a transaction without savings of any kind.

Hey Thurgelmir - thanks for the reply!

That's essentially the issue - this new property is vacant and quite sought after whilst our's isn't yet on the market so we're looking for a way to raise a deposit in the short term whilst our capital is tied up in this current property.

Nae savings I'm afraid but lots of capital tied up in this house and an excellent credit rating. We need to find a minimum of £24k short term to persue this new house.

Again, thanks for your reply much appreciate it.

R_P_W

Pippilongstocking wrote: »

Hey Thurgelmir - thanks for the reply!

That's essentially the issue - this new property is vacant and quite sought after whilst our's isn't yet on the market so we're looking for a way to raise a deposit in the short term whilst our capital is tied up in this current property.

Nae savings I'm afraid but lots of capital tied up in this house and an excellent credit rating. We need to find a minimum of £24k short term to persue this new house.

Again, thanks for your reply much appreciate it.

I wouldn't get too excited about this.

If there is lots of interest in the property, you have no savings and you are not in a position to proceed with the purchase. Don't thing it's gonna happen, sorry

Pippilongstocking

Nae worries RPW thanks for taking time to reply.

OH is talking to a financial advisor today as we realise the options are limited, so not getting hopes up too madly.

One thing he's talked about is remortgaging, changing this to a buy to let (if that's an option) but ideally getting rid of this flat first is the preferred option.

Thanks for your time, I'm not getting too excited, looking at options it seems unlikely we'll find a solution to it aside waiting and getting this on the market pronto.

barbaraemmerson

Would it be possible to put your flat on the market as is at a much cheaper price so it is snapped up quickly allowing you to quickly purchase dream home?

getmore4less

How are you going to pay for the work if you have no money?

What's the SOA look like how much free cash(including debt reduction) is there to pay a mortgage.

You will have a mortgage payment of under £200 now, heading up to £800-£900 unless you go very long term even £180k over 30 years @ 3% will be £760pm

As above I think you are looking months ahead of your schedule and will be taking a risky path if you have two places to fund and in reality have only been paying of the debt quite slowly.

Pippilongstocking

barbaraemmerson wrote: »

Would it be possible to put your flat on the market as is at a much cheaper price so it is snapped up quickly allowing you to quickly purchase dream home?

Thanks BarbarE - that's the current thinking, and if the other house is still available then we'll be able to go for it - there's only a few minor things here to do to get it on the market quickly - we live 300 miles apart until May so that's the other issue, my hubby works full time and is often away for work, so its slowed things right down.

In reality its not much here to get it on the market, a real declutter, few bits of paint to touch up and some laminate floor to finish and a new boiler needed. That's about the size of it.

Putting it on at a competitive price is a really good option, market it picking up.

getmore4less wrote: »

How are you going to pay for the work if you have no money?

What's the SOA look like how much free cash(including debt reduction) is there to pay a mortgage.

You will have a mortgage payment of under £200 now, heading up to £800-£900 unless you go very long term even £180k over 30 years @ 3% will be £760pm

As above I think you are looking months ahead of your schedule and will be taking a risky path if you have two places to fund and in reality have only been paying of the debt quite slowly.

Hi there thanks for the reply GMFL - focus has been on debt repayment and all of those the debts here will be finished at the end of this coming month, therefore giving spare money available to do the last of the work on the house will be free at the end of this month.

:j


From May we'll also have two salaries in one household too, whilst its only been one salary here for the past 8 years and two separate houses to pay for.

Like you say the timing isn't ideal at all but the new mortgage will be less than the old mortgage+rent and travelling we've been incurring whilst living apart, so the new mortgage repayment is actually likely to be cheaper than our current payments.

The primary focus has been on debt repayment rather than mortgage over payment for a while now, and its certainly helped to clear my partners debts.

It may be that we just have to wait but wanted to explore the options we have.

Thanks for the reply.

getmore4less

If the place is what you want with others not coming up often and it will consolidate the living saving money then going for the quick sale of the flat may make sense.

Get it on the market ASAP and be in a position to look serious to the sellers of the place you are looking at.

It may even be worth finding the work now on 0% CC if you can cover it in couple of months free cash flow.

Is the new place priced to sell, would it creep up to the £250k mark if a lot of interest.

I would also look to borrow more than you need and make sure you have a contingency/emergency fund starting the new life.

Pippilongstocking

Hi there GM4L thanks.

The new place is 'offers in the region of 240k' - it might indeed creep up they've lots of viewings but so far only one 'note of interest'. So it might stay under the 250k but who knows really, if it went over that the extra stamp duty would also be an issue I guess.

OH talking today to advisors with a mind that if we need to blast the boiler short term on a 0% card that would be an option and a huge effort of just decluttering would mean its ready quite quickly - the place is in good enough repair otherwise and is generally pretty well (if plainly) decorated.

You're right getting it on the market quickly would indicate seriousness on our parts. Thanks.