Sorted thanks.

Bobby_Applejuice

dimbo61 said:

If Halifax will offer you a mortgage with 10% deposit (£55,000) and the other £15,000 for stamp duty , legal costs then you will( should ) be allowed to overpay by 10% each year.
That would be £47,000 in the first year if you can sell the flat quickly.
Paying another 10% in the second year would knock another £40/45,000 off the mortgage debt.
Remortgage in 2 years time when your LTV would be below 75%.
If you sell both properties and using all the equity you may even hit 60% LTV 
First thing is to get your properties on the market 

Thank you - some clear advice here.

getmore4less

What rate and size mortgage have you been offered .

You can work out the extra cost of getting this house and decide if that is worth it just wait for the next perfect house to come along.

Some rough numbers looking at Halifax based on £525k going for the 90% LTV to retain cash for the fees and SDLT
90% is going to be 3.09% 
75% is going to be 1.31%

looking at around say £473k borrowing adding the £999 fee
£2300pm  that must be 25 years so go with that

After 2 years paying the same on those rates before overpayments(when you sell) you are left with 

amount	rate	payment	owing
£473,999.00	3.09%	£2,270.01	£448,051.82
£473,999.00	1.31%	£2,270.01	£431,405.29

Trying to get this one on that high rate is costing up to  £16.5k extra + the costs of running 3 properties. rather than 2. 
sell and overpay will help bring that extra interest down but this is going to be the case with most lenders.

if you could squeeze to 85%(£80k down that will help a bit)

Also when it comes to the overpayments 
ERC in the second year would be 1% so on a 3.09% rate it would be worth paying that

There may be other lenders that can help maybe with an ERC free product or even a 1y deal.
That is one for a broker to help with.

lucypilates

Bobby_Applejuice said:

SDLT_Geek said:

Do not forget the extra 3% SDLT if you complete the purchase while still owning the other properties.

We did not know this - thanks (i think) for the heads up .

Plus you’ll need to factor in the costs of 3 insurances - 2 of which will be for unoccupied property which can really bump up the premiums and you’ll need to be able to visit the properties on a weekly basis to keep the insurance valid ... it’s an expensive way to get your dream home but if it really is your dream home, then you should go for it if you can! 

seradane

lucypilates said:

Bobby_Applejuice said:

SDLT_Geek said:

Do not forget the extra 3% SDLT if you complete the purchase while still owning the other properties.

We did not know this - thanks (i think) for the heads up .

Plus you’ll need to factor in the costs of 3 insurances - 2 of which will be for unoccupied property which can really bump up the premiums and you’ll need to be able to visit the properties on a weekly basis to keep the insurance valid ... it’s an expensive way to get your dream home but if it really is your dream home, then you should go for it if you can! 

Presumably the OP is selling those houses, it just may not be quick enough to secure the sale on the "dream home", so the properties are hardly sitting there vacant for years.

But as you are able to get a mortgage while still owning the other properties, I would march on - offer on the property as if you're chain-free, but have your properties on the market anyway. You never know how long the property purchase will take - there's every chance the sale of your current properties will go through before your purchase, in which case you can adjust your mortgage accordingly. But if not, you still secure the dream home.

And yes, definitely look into mortgages with no ERC so you can renegotiate once you've sold everything.

Also with the SDLT I understand the 3% is refunded if you sell your main home within a certain period of time after purchasing the second property. But guess it does affect the cash flow for the purchase.

katie91_2

A similar thing happened to us, and I write this from the ‘dream’ house which we moved into last week! We loved it immediately and knew it was unlikely another one we liked as much would come up in the next 1-2 years as we wanted something on specific roads on a specific estate, so for us it was worth keeping our existing property and either renting it or selling after we’d bought.

Also worth considering if the flat you’re thinking of selling has, or may require, an EWS1. If it needs one and doesn’t have it, selling will be very difficult.

bpj

seradane said:

Also with the SDLT I understand the 3% is refunded if you sell your main home within a certain period of time after purchasing the second property.

 The experts here may correct me but I believe they will not be able to reclaim the higher rate unless OP has disposed of their flat prior to the purchase.

Based on this understanding of the facts: OP owns a flat which is not their main residence. Their partner (not married) owns a house which is their main residence.

So if OP still owns their flat on purchase of the new property the higher rate will be due, but OP does not have a main residence they can later dispose of to claim the refund.

If the flat has been OP's main residence in the past this might not apply depending on timings would need a bit more detail to be sure.

I think if OP was married and living with partner, disposal of partner's main residence might count for both. Worth checking with an expert before proposing though!