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Is this possible?
seven-day-weekend
Posts: 36,755 Forumite
We have a house with no mortgage that has just been valued at £130 to £140k. We want to buy a bungalow for which we intend to pay between £135k and £138k.
We would like to buy the bungalow before we sell our house so that we are able to do the work it requires before we move in. Therefore, we would like to borrow around £95-100k on our present house, interest-only, to be repaid when we sell it.
We are both pensioners (65 and 66) and have an annual income between us of £23,800. We have around £60k in savings and are at present saving £500 a month (which we could use to service the mortgage).
The only debt we have is an interest-free credit card with about £1.5k on it, which we could pay off if necessary.
Do you think anyone would do this, or would they not touch us with a bargepole?
All contributions welcome!
We would like to buy the bungalow before we sell our house so that we are able to do the work it requires before we move in. Therefore, we would like to borrow around £95-100k on our present house, interest-only, to be repaid when we sell it.
We are both pensioners (65 and 66) and have an annual income between us of £23,800. We have around £60k in savings and are at present saving £500 a month (which we could use to service the mortgage).
The only debt we have is an interest-free credit card with about £1.5k on it, which we could pay off if necessary.
Do you think anyone would do this, or would they not touch us with a bargepole?
All contributions welcome!
(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
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Comments
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I doubt it.
You are probably looking at a bridging loan which is going to be around 6-12% interest plus fees of around £2-3k plus legal/valuation fees on top.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
I doubt it.
You are probably looking at a bridging loan which is going to be around 6-12% interest plus fees of around £2-3k plus legal/valuation fees on top.
Wow. Expensive. :eek::eek:
What exactly would be the problem?(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
It would be short-term borrowing and mortgage lenders don't like it.
Add to that you also want interest-only presumably with no repayment vehicle other than sale of property and your lender pool is dwindling rapidly...I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Right, I understand.
I take it a high street lender would not touch it. Is it worth asking a mortgage broker?(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
A broker could make it happen but I would take a bet you won't like the terms.
You will probably decide it is more prudent to do the work on the new place whilst you are in it.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Well I'll ask the broker and see what he says. Thought it would be a way of buying the bungalow quicker than if we had to sell our house first and also useful for doing work.
We will have two houses as equity...don't see why it is a problem myself, but accept what you are saying.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
seven-day-weekend wrote: »We will have two houses as equity...don't see why it is a problem myself, but accept what you are saying.
Not the way that lenders think when it comes to mortgage lending. Avoiding any hassle is the primary concept when making loan advances.
Why not sell and live somewhere else temporarily?0 -
Just to say we were not able to get a loan on our existing property....but we were able to get one on the bungalow.
The sale has completed and we are now doing the work, which we could not have done whilst living in it.
Thanks all for your advice.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
If you don't want to live in the bungalow while doing works why not rent something small nearby? Just think of that and compare the costs of a mortgage / loan vs renting .0
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Rollinghills wrote: »If you don't want to live in the bungalow while doing works why not rent something small nearby? Just think of that and compare the costs of a mortgage / loan vs renting .
The mortgage is £325 pcm and we will almost certainly only make a couple of payments before paying it off (I have had a change of circumstances which means we will not need to sell our existing home straight away). There is a penalty of £3k for paying the mortgage early, but we felt if preferable to moving twice, especially as we might not now sell the house. It is also probably as cheap as renting for six months. We can now do the work at our leisure.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0
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