Can we buy this house?

MB1975

We are relocating for work and have seen the perfect house. Our current house (no mortgage and owned outright) is valued at £255,000 - ‘new’ house £395,000 (moving north to south - so way more expensive). We have figured we can scrape together £85,000 deposit from various savings accounts. The remaining mortgage of £55,000 would be fine as I would qualify for about £290,000 on my own. Our house is going on the market on Tuesday - just wondered if there was only way to secure ‘new’ house before selling!

tommyt-saver

MB1975 said:

We are relocating for work and have seen the perfect house. Our current house (no mortgage and owned outright) is valued at £255,000 - ‘new’ house £395,000 (moving north to south - so way more expensive). We have figured we can scrape together £85,000 deposit from various savings accounts. The remaining mortgage of £55,000 would be fine as I would qualify for about £290,000 on my own. Our house is going on the market on Tuesday - just wondered if there was only way to secure ‘new’ house before selling!

Put an offer in with conditions of your current unknown sale situation?

theoretica

You want to buy the new house before you have necessarily sold your current one?

have 85k deposit and you along could get a mortgage of 290k - that only leaves you 20k + expenses short.  Could you get a higher mortgage agreed if you added your partner in - but only actually take it out if your present property fails to sell in time?  Or a bridging loan? 

MWT

Don't forget to allow for the additional SDLT if you buy before selling the first home.. a additional £12k would have to be found at the point of purchase, but as long as you do sell your current home within the permitted period you can claim that back.

MWT

MB1975 said:

just wondered if there was only way to secure ‘new’ house before selling!

I doubt the EA is going to want to stop marketing the property or be very fulsome about recommanding the seller to accept your offer if you do not have a purchaser lined up and ready to proceed unfortunately...

No harm in making an offer though, I just wouldn't expect them to take it off the market just yet unless you are willing to proceed with the purchase without your own sale completing as outlined above...

MB1975

Thanks everybody!

Yes. I would be willing to proceed without a purchaser for my house. I have now qualified for a mortgage of £310,000 and so that bridges the gap. Good point about SDLT though - hum. That would be tricky if we didn’t sell in time. 

MB1975

Theoretica - hadn’t thought of a bridging loan. Any ideas about where to find a reputable company? 

theoretica

MB1975 said:

Theoretica - hadn’t thought of a bridging loan. Any ideas about where to find a reputable company? 

Sorry no, just knew someone considering one in similar circumstances 15 years back.

MB1975

Thanks, Theoretica. 

Adding partner to mortgage could be an option. Just concerned of the impact that might have as they are retired and so the mortgage term will be shorter. Thanks for the advice all. 

MWT

MB1975 said:

Adding partner to mortgage could be an option. Just concerned of the impact that might have as they are retired and so the mortgage term will be shorter. Thanks for the advice all. 

MB1975 said:

I have now qualified for a mortgage of £310,000 and so that bridges the gap.

Hopefully your lender is aware that part of the deposit is coming from your partner who will be occupying the property but is not on the mortgage...?

dwsjarcmcd

MB1975 said:

Theoretica - hadn’t thought of a bridging loan. Any ideas about where to find a reputable company? 

I'm not sure that a Bridging loan is the best idea in your circumstances because you will still need a mortgage once you sell your current house.  It may be better (not to mention, significantly cheaper) to take out a mortgage with no ERC's initially - so may be on SVR - then once you sell your current house you can switch the product to something more suitable or re-mortgage on the amount you need to borrow 'post-sale'