Temporary Mortgage

DanFrost

Hi Just after some advice please does anyone know if- we are selling our house at 160k we owe 50k, we have seen a run down project at a auction for 125k-145k my question is would the bank lend me the money as a mortgage for a short period in time while our current house sells, I have a mortgage in principle for 110k, is this something they do or not the property we have seen could potentially be worth 375k+ in 6-12 months. However we are looking at it as home.
Any advice would be great or if you've been in a similar situation and found a way around it, I have 18 days until the auction then 20 days to pay in full.
Thanks

[Deleted User]

You'd just take out a mortgage (if you can get one) and then pay it off when appropriate.  Just make sure you understand the early redemption costs.

However, if you successfully bid for the property and then can't get a mortgage, you're going to have a problem on your hands.

MovingForwards

A run down project may not be suitable security for conventional mortgage lenders. Also if the property is a safe bet it wouldn't be put in an auction, so what's wrong with this bargain property.

With mortgages currently taking 4+ weeks from application to offer, you will struggle to meet the terms of the auction contract, being in breach of them will cost you a considerable amount of money.

Speak with a broker as most people who buy at auction are cash buyers, with the funds in the bank ready to go and their solicitor waiting for instructions.

theoretica

Often bridging loans are used for this.  You may find it easier to secure more borrowing against your current property.