Mortgages, Bridging Loans and Other Finance Advice Please

CelticStar

In the next year or so my OH, my grandmother and myself are planning to sell our two houses, pool our money and buy a property that has an annexe or separate dwelling attached so that my Nan can live nearer us as she gets older as she wants a more labour-saving property and is a bit nervous living on her own. We have all always been very close and I lived with her (and my grandfather) for many years very happily before I got married. From a financial and family point of view we all think it makes sense for us so I am not asking for any comments on us moving in together - there are other family members I would never dream of living next to but my Nan is very independent, never interferes and is very supportive of us.

Obviously, it is going to be a huge palaver trying to co-ordinate selling two houses whilst trying to find the type of property we want in the area we want it. I just wanted to get some advice on what financial solutions are available to us. If one of the houses sold and the other one didn't sell (for a while) would we be able to release the equity in the unsold house if the right property came up for us to buy - and would this make sense financially? Both properties have a good amount of equity in them, my Nan owns hers outright and we have a mortgage of about £40,000.

Any advice gratefully received.

CS

MortgageMamma

CelticStar wrote: »

In the next year or so my OH, my grandmother and myself are planning to sell our two houses, pool our money and buy a property that has an annexe or separate dwelling attached so that my Nan can live nearer us as she gets older as she wants a more labour-saving propery and is a bit nervous living on her own. We have all always been very close and I lived with her (and my grandfather) for many years very happily before I got married. From a financial and family point of view we all think it makes sense for us so I am not asking for any comments on us moving in together - there are other family members I would never dream of living next to but my Nan is very independent, never interferes and is very supportive of us.

Obviously, it is going to be a huge palaver trying to co-ordinate selling two houses whilst trying to find the type of property we want in the area we want it. I just wanted to get some advice on what financial solutions are available to us. If one of the houses sold and the other one didn't sell (for a while) would we be able to release the equity in the unsold house if the right property came up for us to buy - and would this make sense financially? Both properties have a good amount of equity in them, my Nan owns hers outright and we have a mortgage of about £40,000.

Any advice gratefully received.

CS

There are several ways this can be done without resorting to expensive bridgeing loans - however your situation is not overly complex to to trained eye but does need careful planning and co-ordination.

You are not alone moving into a larger house as an extended family, there are lots of people that always have and continue to do so. I am actually considering something similar myself in the next 5 years. If you have a family you get along with thats great and can I just commend you on looking after your elderly relatives as there are too many people who do no these days.

Sorry I know you said no comments about the co-habiting.

Your options are, finances permitting

if one sells and the other doesnt, then all move into the unsold dwelling until it does sell. or the party whose home does sell could move into temp rented accom.

you could always use the equity from the sold property to proceed and do a let to buy on the unsold property. this is an arrangement whereby the new mortgage lender does not take into account the mortgage commitment on the sold property because it is rented out.

there is also a little known third option, and this may or may not be suitable for you and that is to complete on the new loan without the old one selling. so long as the property is being actively marketed and you have at least 25% equity in it, there is a lender who will allow you to complete on the new loan. of course you would have to ensure you could afford both mortgage payments and one way to do this is to temporarily switch both loans to interest only.

Your circumstances need full assessment and consideration by a suitably qualified and experienced mortgage broker, do not try to do this alone, as, unless you get lucky and sell and complete on both properties simultaneously, it could get messy.

MM

CelticStar

MortgageMamma

Thank you so much for your comments and advice, which I really appreciate. I have had a quick read through and you have already given me options that I did not know existed so I guess I now need to consider them more carefully with the input of my OH and grandmother.

It looks like we will certainly need a mortgage broker, which is what I suspected.

Thanks again - oh, and thanks also for the comments about us cohabiting (I don't mind nice comments!:rotfl:) My Nan has been a fanastic friend and support all my life, so living near her in her old age seems little enough repayment.

CS