advice needed

wsc22

Hi all,
I am new here but would appreciate if anyone can give me some advice.

We are moving to another city due to taking up a new job, so we have put our current house on the market. We have only very little left (10% of the asking price of our house) in the martgage but have not cash reserve as I always prioritise repaying the mortgage.

We now are looking to buy a new house in the new city we are moving to, and found we are in a very strage position. We would like to reserve a plot in a new development, but on top of £1K fee to reserve the plot I think we also need to show we have capacity to buy the house. Unless we wait until we sell our house and through the completion, we won't get the money in our bank as deposit to reapply for a new mortgage. The strage situation is that I think it is fair to say we are in a strong position to buy the house (have 90%+ cash if we get the money), but we cannot reserve a plot in the new development.

Shouold I talk to my current mortgage provide (Nationwide)? Or any recommendation on our situation would be hugely appreciated?

Thanks

alex_163163

You're position does sound strange at all really. You want to buy a new house but to do so you need to sell your current one - think that is the position most people find themselves in.
You said your current house is on the market? Well as soon as you have an offer on that, you will be in a proceedable position to reserve the new build. You shouldn't need to have completed on your current property sale to do this. As long as you have accepted a firm, viable offer you should be fine to proceed with the new developer reservation.
Alternatively does the developer offer part exchange?

Davesnave

Your situation is far from unusual, but if you are trying to tie up the purchase of a new build, which may not even be constructed yet, the sale of your current house and starting a new job, then the obvious answer is for at least one of you to rent in the new area for 6 months.

Anything else is unlikely to work out in one respect or another, unless p/exchange is available.

wsc22

Thank you Alex_163163 and Davesnave,
The situation is now the new house in under construction, but it is going on so I don't know should it be called as buy off-plan. We visited other plots onsite, and have a sense on what it is like.
Our current house was put on the market Friday last week and now we have two visits lined up to view the house today.

Do you think that to talk to any mortgage provider (such as our current mortgage provider or any mortage broker) is an option? As they know how much we left in the mortgage and can arrange a valuation so will know that we should be in a solid position to apply for a new mortgage with them. Then they provide a certificate that they would like to lend us "£xxxK" which exceeds the property price so we are in a position to proceed? Does this sound a strage way forward?
Thank again guys.

Davesnave

Speaking with your current mortgage provider would be a good thing to do, as would exploring other options with an independent whole-of-market advisor, before committing yourself.

fairleads

Based upon the infromation provided i would say that until the proceeds from the sale of your house are in your bank account, your position is not at all strong

alex_163163

Yes speaking to a mortgage advisor would be a good idea. I still get the sense you think you are in a very unusual position, but be assured you're really not.
Go see an independent mortgage advisor. They will look for the lender most suited to you and your circumstances. Then they will go through the affordability checks to see how much you could borrow etc. They will give you the DIP (the certificate) to show the developer for the mortgage amount you will need.

However in terms of reserving the plot, you are unlikely to be able to do this still until you have accepted an offer on your current house. It's great that you know you would be able to afford the new house, however the developers will only care if you are in a proceedable position (i.e. You have accepted an offer on your current house, or have all the funds in the bank already.)
But there is no harm in getting the DIP in place now for when your current place sells, although they are only valid for a certain amount of time, and some lenders do perform a hard credit check at DIP stage I believe.

wsc22

Thanks everyone for your advice. I will talk to my mortgage provider (Nationwide) and a couple of independent mortgage advisers to find the best way forward and see where I am.
Another thgoutht, a stupid question, can I remortgage my current house while I have put it on the market?

Thanks again

alex_163163

Can I ask why you want to remortgage when you are selling it? are you out of an initial fixed interest rate you took out or something? Not worth remortgaging if you plan on selling it in next few of months I would have thought.