Buying before selling.

evergreen

I am downsizing but have not put my house on the market yet. Have seen a house I want to buy. Can pay for some of it with savings but not all. Would I be able to get a short term mortgage for the rest until I have sold mine. I am retired so not sure if I’d be eligible for a mortgage. I have no mortgage on the larger house which I’m selling. Would appreciate advice. Thanks.

george4064

I think what you are after is whats called a 'bridging loan', I don't know much about them so you would have to do your own research into finding a suitable bridging loan for you.

foxy-stoat

Speak to a broker for options, you may not have any if age and income isn't where it needs to be.

You can make an offer subject to you selling your place, everything sells at a price so if you want a quicker sale is it cheaper than other similar properties?

tom9980

My former neighbour used a bridging loan to buy a property in france while the marketed their property for a price of £305k on a property i thought worth £265k. They after 6 months sold quickly for £240k as the costs began to spiral, equivalent property sold the same year for £255k then another for £265k a year after.

Their initial greed cost them a good £25k

PasturesNew

Be careful...

A bridging loan is the main way, but yours might not sell, or yours might not be worth what you think it is (what the agent let you believe so you'd sign up with them). And every day the bridging loan's costing you more and more .... and, even when you have a buyer, you're now gambling your expensive bridging loan on the desire/ability for that buyer to wish to complete and in a timely manner.

I put my house on for what the agent suggested.... and dropped the price ... finally selling 8 months later. A short chain (3), both sales through same agent (with a vested interest), but the bottom/FTB had to go through four differing mortgage applications before they got one, which took another 5 months.

On the other hand, you might get a cash buyer on day one that completes in 10 weeks.

How lucky do you feel?

Put yours on the market. You might lose the one you want now, but you'll at least know where you stand.

[Deleted User]

What you need to think about first is what is a realistic price for house you are selling ? Then work out how much the costs and interest will mount up to with a bridging loan. Plus having the funds to INITIALLY pay the second property stamp duty - which will be a lot- until you sell and claim the refund as you replaced your main home with another.

You may decide therefore that you might as well “price your house to sell “ with a quick sale buyer required. However thats only beneficial if the house your buying actually proceeds quickly

eddddy

There are 'bridging loans' - but the interest rates can be a bit 'eye watering', and there can be some very costly risks.

Examples of the risks include: you take out a bridging loan, put your house on the market, and...

• You take a few months to find a buyer, then a few months later that buyer pulls out... and the same thing happens again with another buyer.
  
  You could have 6 to 12 months of extortionate bridging loan interest to pay

• A buyer finds a problem during the purchase of your house - which takes months to resolve. (Worst case, if a surveyor finds evidence of something like subsidence, the house could be practically unsaleable for a couple of years.)
  
  Again, you could have months or years of extortionate bridging loan interest to pay

It might be a better option to put your house on the market at a cheap price to get a quick sale.

evergreen

Thank you for all your replies. I didn’t realise I’d have to pay the enhanced stamp duty, I thought I had 18 months after purchasing to sell my house before that was payable.

lees80

You have to pay it then claim it back.

Sounds like affordability could be an issue depending on your income. Interest on bridging loans is astronomical. You need to have a solid plan on case your property doesn't sell and you end up paying interest that quite frankly, will be eye wateringly expensive.