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Short Term Mortgage to simplify house chain
dbsevern
Posts: 16 Forumite
I am looking to move, primarily to be nearer to my wife's place of work. We are in no real hurry to move, but when we find a house we like, we would like to be able to move swiftly (and ideally simply). We own our current home outright, and also have savings for a deposit on a new house, so were wondering on the sense of taking out a mortgage (on the new property) to complete the purchase of a new house, and then selling our current house "at leisure", with a view to paying off the mortgage on the new house once the sale had completed or shortly thereafter. If we can find a suitable mortgage with no early repayment charges, then in theory we will only be out of pocket for the arrangement fees and interest for the period between buying and selling. Does this seem a sensible way forward, and are there any pitfalls we should be wary of? Lots of things I have read seem to suggest a bridging loan as the best option, but if we can get a 2 year fixed with no early repayment charges and low application fee, we have two years to sell the other house.
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Comments
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Mortgage lenders don't like short-term lending and many/most won't lend for less than five years.
If you make noises to them that you'll take a longer term but pay it off in two, they will decline you for the above reason, so don't think aloud when speaking to a lender.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 -
This would work if it suits you.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 -
I can understand that a lender might not want to offer a mortgage for a short term, but if the mortgage has no repayment charges I could in thoery pay it off early for any number of reasons (winning the lottery?!). The lenders don't ask how long you expect to hold the mortgage do they? Don't want to lie to them, but if they don't ask the question what would I be doing wrong?0
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Like I said, don't think aloud about what you might do in the future.The lenders don't ask how long you expect to hold the mortgage do they? Don't want to lie to them, but if they don't ask the question what would I be doing wrong?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
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