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I have BAD credit, I want a new home, is it better sell my old one first or buy and then sell

I have terrible credit and I want to buy a new home. I originally wanted to sell my current home first and then look for a new property, but I heard that if I sell and try to buy with no properties to my name this will make it harder for me to get on the property ladder again! Is this true because of my bad credit? But If I sell my old home after I buy a new one I have to pay ridiculous stamp duty fees of £10,000! and I can't afford this, so what do I do? Is it better if I pay the stamp duty as having a previous existing property will make it easier for me to get a home because of my bad credit?

Comments

  • Slithery
    Slithery Posts: 6,046 Forumite
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    ...but I heard that if I sell and try to buy with no properties to my name this will make it harder for me to get on the property ladder again!
    Where on earth did you hear that?
    Why not just buy and sell simultaneously like most people?
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
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    If you have bad credit you might not get a mortgage at all.... you'd certainly not get TWO while you're in possession of the old and the new.  You have to sell your old house before you buy a new one..... only wealthy people can buy/own two overlapping.  People with bad credit can't be doing that.
  • If you have bad credit you might not get a mortgage at all.... you'd certainly not get TWO while you're in possession of the old and the new.  You have to sell your old house before you buy a new one..... only wealthy people can buy/own two overlapping.  People with bad credit can't be doing that.
    Thanks, but I didn't mean buy two, I already have a home that I am currently living in, so I want to buy one property and get rid of this one
  • Slithery said:
    ...but I heard that if I sell and try to buy with no properties to my name this will make it harder for me to get on the property ladder again!
    Where on earth did you hear that?
    Why not just buy and sell simultaneously like most people?
    Thank you for your advice! I heard that from a friend who sold her home and has similarly bad credit to mine, she found it really hard to get back on the property ladder and the advice she gave to me was to not sell my home before I buy another one first, but I don't know if this was just her situation
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    If you have bad credit you might not get a mortgage at all.... you'd certainly not get TWO while you're in possession of the old and the new.  You have to sell your old house before you buy a new one..... only wealthy people can buy/own two overlapping.  People with bad credit can't be doing that.
    Thanks, but I didn't mean buy two, I already have a home that I am currently living in, so I want to buy one property and get rid of this one
    Exactly. The one you have now, plus another. 1+1=2. Might this be why your credit's poor?

    When people say it's hard to get back on the property ladder, they mean because prices have risen while they're spending the sale money on rent. Or, in cases where poor credit is an issue, because nobody is going to lend to you. If your credit is that bad, you aren't going to remortgage, even for your existing place. Whether you already own a house is separate. Can you afford to move to where you want without borrowing more? Just be porting your existing mortgage?
  • trex227
    trex227 Posts: 290 Forumite
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    edited 1 April 2020 at 11:35AM
    I would of thought buying and selling at the same time (as people commonly do) would be the less risky option. You don't want to sell your house and then something changes and its not possible to get a new mortgage. However your ability to do this all depends on whether you can get a new mortgage/port your existing mortgage to a new property. I would advise getting in contact with a broker who deals with adverse credit or if you plan to port, your existing lender.
  • RelievedSheff
    RelievedSheff Posts: 12,640 Forumite
    10,000 Posts Sixth Anniversary Name Dropper Photogenic
    Just buy and sell at the same time like most people do.

    Although you might find that in the current climate you will struggle to get a mortgage at all as adverse lenders retreat from lending.

    You may just have to sit tight for a little while until the dust settles down.
  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    I have terrible credit and I want to buy a new home. I originally wanted to sell my current home first and then look for a new property, but I heard that if I sell and try to buy with no properties to my name this will make it harder for me to get on the property ladder again! Is this true because of my bad credit? But If I sell my old home after I buy a new one I have to pay ridiculous stamp duty fees of £10,000! and I can't afford this, so what do I do? Is it better if I pay the stamp duty as having a previous existing property will make it easier for me to get a home because of my bad credit?
    I dont understand what you mean, just buy in a chain - like 90% of house purchases
  • greatcrested
    greatcrested Posts: 5,925 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Speak to an independant mortgage broker. Thay will help you find out whether your bad credit means you will be unable to get a mortgage, or whether you can. That is step one. without knowing that, you are just dreaming!
    Assuming a lender can be identified who will accept your credit record and approve your income level for the amount you need/want to borrow, then you can consider buying.
    Like most people, the way to mximise your purchasing power is to use the money tied up in your current property. Either
    1) do as most people do - sell and buy simultaneously, or
    2) sell first, live somewhere temporarily (though an indeterniate period!) eg rent, with family etc, and then buy later
    Trying to buy first is mad. As you say, there's the extra SDLT (though you can reclaim it wen you sell), but the chances of a mortgage, especially with bad credit, are minimal for a 2nd property.
  • eddddy
    eddddy Posts: 17,840 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    MoneyHelp875 said:

    I heard that from a friend who sold her home and has similarly bad credit to mine, she found it really hard to get back on the property ladder and the advice she gave to me was to not sell my home before I buy another one first, but I don't know if this was just her situation

    I think you've misunderstood how property selling and buying normally works.

    Normally, you sell and buy at the same time. For example, on the 12th May at 12 noon you stop being the owner of your current property, and at that exact moment you become the owner of your new property.

    You would arrange your mortgage etc in advance. So if the banks won't give you a mortgage, you will know in advance, and you can decide not to sell and buy.

    Start by asking a mortgage broker about the likelihood of you getting a mortgage, and how much a bank might lend you.

    Mortgage brokers, Estate Agents and Solicitors etc will probably all assume that you want to sell and buy at the same time (as described above), because that's what almost everyone does. 

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