Advice re mortgage please?

biscuit.lover

Hi, I own a house with a substantial amount of equity in it which has a mortgage on it. I have put a deposit on a new build which is due to be completed in Feb/March 2015.
I am going to put my existing house up for sale in the next two weeks, however if it hasn't sold by the time I need to complete the sale on the new house I'll be stuck as I can't have two mortgages...or can I? Will I have to put the new house on a buy to let? I don't want to do this as it's only going to be short term until my old house sells. There must be a way around this?

Please can anyone help?

nubbins

A proper mortgage adviser will put you straight but I looked at loads of options regarding this. I had a mortgage offer from Halifax for another house but had not sold mine and was thinking of keeping it for a while, when I got the mortgage offer through one of conditions was that I had to sell my current home or at least have an offer on it. That house did not go through but when I done some digging it seems you can have two residentials but your income/wages must be able to cover both mortgages plus if you have any car loans,credit cards, other loans/finance they will take this into consideration.
What you could do is change your mortgage into a no redemption buy to let, take as much as you can leaving the 25% needed for BTL and not having any redemption penalties means you can sell it whenever or see if you current lender will to a consent to let on your current mortgage. Basically from the lenders point of view they consider both BTL and CTL as you not having to dip into your pocket each month to pay both mortgages so you should be able to get a normal residential mortgage on your new property. If that makes sense.

Thrugelmir

How long before you are required to exchange contracts on the new build?

lonestarfan

They generally don't treat Consent to let as not having to cover that from your income. Only BTL is considered self financing and not taken into account as an outgoing.

nubbins

I am not sure that is 100% accurate, I believe it depends on the lender.

Theres a thread about it

http://www.propertytribes.com/consent-let-on-mortgage-what-truth-here-t-784.html

tvfreek

Have I read this correctly? You've put a deposit on a new house but have neither a mortgage offer nor put your house on the market as yet.

You will need a let to buy product and I dare say to engage a decent broker to organise it for you.

GMS

What LTV is the new purchase?

What is the current property worth?

How much do you need to take out of the current property to complete on the new purchase?

Subject to affordability you MAY be able to have 2 residential mortgages however if you want to sell the current property be aware of changing mortgage products and the costs to get in and out of the mortgage.

Broker would be useful here

amnblog

Some lenders allow there to be an overlap for a short period of time.


A situation that a broker can help you to deal with.


Switching to BTL on the new property is not a solution.

biscuit.lover

The current situation is that i have savings of just over 51,000 in the bank doing nothing. I owe around 80,000 on my current mortgage. My house is worth around 158,000 so i have equity of about 75,000.

The house i'm buying is 145,000. My original idea was to let out my current house which is in a great area with sought after schools etc. I have bottled out of this as i have no experience of being a landlord.

We earn jointly 3,791 a month before tax. My mortgage is 570.00 a month and there are no outgoings such as loans credit cards etc. We have the usual bills utilities sky etc. (One of the reasons for downsizing is to reduce utility bills).

I need a broker.... I'd prefer to deal face to face. I'm lost in all of this stuff.

I really appreciate your input guys and I will read that thread now thanks.

amnblog

A bridging loan will work for you.


It all depends how important it is to secure your purchase.

nubbins

If I was in your situation I would speak to your lender first and explain the situation. I am not a broker but looking at your figures I would have thought you would pass the affordability criteria even if you had mortgages on both properties using your £51000 deposit. So they might give you another mortgage of approx £95,000 add your deposit and away you go. You can then just put yours on the market without any stress. I am sure a good broker will easily be able to sort you out.