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Interest Only Mortgage to buy with no chain?
Erdynep
Posts: 2 Newbie
Hi, hoping someone can help with advice on my situation.
I am looking to move house. I currently have no mortgage on my existing property and have a sizeable deposit to put towards a new property and am thinking of how I can purchase a new house without the pain of being in a chain.
Example figures:
Deposit 200k
Current House Value 350k
House Purchase price 650k
I could easily afford a repayment mortgage of 100k to purchase the new house, but that would require selling my existing property first and being in a chain. I am thinking I could avoid the hassle of a chain by not selling my property first and having a mortgage of 450k.
I would pay more stamp duty due to it being considered a 2nd home, but then would be able to claim that back once the original property was sold.
However, I would not be able to get a repayment mortgage for 450k, so I am thinking of taking out an interest only mortgage that once my existing property is sold, I can then pay off the 350k and reduce the mortgage back down to 100k which I could then move to a repayment mortgage.
Does this sound like a sensible approach or are there issues with this I have not considered?
Many thanks
I am looking to move house. I currently have no mortgage on my existing property and have a sizeable deposit to put towards a new property and am thinking of how I can purchase a new house without the pain of being in a chain.
Example figures:
Deposit 200k
Current House Value 350k
House Purchase price 650k
I could easily afford a repayment mortgage of 100k to purchase the new house, but that would require selling my existing property first and being in a chain. I am thinking I could avoid the hassle of a chain by not selling my property first and having a mortgage of 450k.
I would pay more stamp duty due to it being considered a 2nd home, but then would be able to claim that back once the original property was sold.
However, I would not be able to get a repayment mortgage for 450k, so I am thinking of taking out an interest only mortgage that once my existing property is sold, I can then pay off the 350k and reduce the mortgage back down to 100k which I could then move to a repayment mortgage.
Does this sound like a sensible approach or are there issues with this I have not considered?
Many thanks
0
Comments
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Well the main issue would be getting an interest only mortgage for 450k.0
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Most sensible Brokers can do this for you immediately.
You could raise enough to buy in about 2 to 3 weeks assuming the properties value up.
You take short term lending now to complete the purchase, and have permanent lending ready to go when you sell your current property.
Both could potentially be interest only.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
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