Moving house, finance, advice

jay9011

Hi,

I'll try and keep it as simple as possible. 

I own my house outright and it's ready to go on the market (in the current market, it would sell quickly).
We've found a property to buy, but the newbuild developer says it won't take reservations on plots until I have an offer on my house. 
Now, I know the developer's completion schedules often run months over and it's not due to be finished for six months minimum. 
Finding a short-term let in case the new-build isn't ready or the buyer won't wait would be near impossible in our area. 
 
Is there a way to borrow money short-term against the value of a house I own outright? Effectively buying the newbuild before selling my house. 
That way we could stay in our home until the newbuild is ready. 

Thanks for any advice. 

Slithery

Have you asked the builder if they'll part-exchange?

jay9011

Slithery said:

Have you asked the builder if they'll part-exchange?

Hi, the demand is so high, they've stopped any p/ex schemes. 

Flick85

I’m in this exact situation atm, but am selling a flat rather than a house.

After much deliberation, I decided to put my flat on the market and see what happens, because the EAs weren’t even letting me view properties until my place was sold. I was careful to inform my EA to only let people view who aren’t in a rush to move because it’s going to take me a while. I ended up going SSTC with an investor who paid over asking price less than 24 hours after putting on the market, on the agreement that I took the flat off the market without conducting any viewings. I agreed, on the understanding that he would either be super patient while I found somewhere to purchase (including poss waiting on new build timelines) or rent it back to me.

I think there’s some buyers out there who are really struggling to find places themselves, so if you are up front with them and only agree offers after explaining your situation, then you have a chance. Atm, the market is so ridiculous that you could be waiting months to get an offer accepted on a non-new build property anyway, so you might find someone understanding of that position.

Good luck!

housebuyer143

Can you get a big enough mortgage to buy it without selling your current house? If so, why don't you do that and then remortgage once you have moved in and sold your house?

eddddy

jay9011 said:

Is there a way to borrow money short-term against the value of a house I own outright? Effectively buying the newbuild before selling my house. 

You'd usually use a bridging loan, but it's very expensive - and it can be high risk.

Are you buying the newbuild with a mortgage? If so, the mortgage lender might reduce what they'll lend you because you'll be paying bridging loan interest on top.


Also the general risks of a bridging loan include:

When you eventually sell your current house...

• You have a series of failed sales, so you're paying high interest on the loan for a long time
• The solicitors or surveyors find a problem. It takes a long time to resolve and/or you have to drastically reduce the price. 
• Property prices tumble, and you have to drastically reduce the price of your current house

If you have to reduce the price drastically, will you be still be able to afford the newbuild (after paying off the bridging loan)?