Options to purchase property whilst existing property still on market

Lucky1974

Thanks all for your contributions...to clarify, 

I have a deposit without selling the property. 

I am aware of the CML 6 months, sorry I should have originally highlighted that part. It doesn't apply from Sept 7th as that will be the 6 month timeframe so in essence if I sold now it would likely be around Sept earliest for completion anyway.

The house is nice is on a busy main road...for example we did did get an offer last week for £265k 15k over but when the lady explored the area she pulled out ( is a tad rough in some parts). 

I honestly think it will sell within 3 months but my main issue at mo is not relying on the house sale to purchase another. I suppose in an ideal world we would like to revert to interest only say for 12 months for argument sake and purchase our new property current one is vacant and for sale.

I hope I've made sense. I don't particularly want to BLT as I would rather move on with just have one property eventually. Obviously if this isn't doable I may have too. 

housebuyer143

Lucky1974 said:

Thanks all for your contributions...to clarify, 

I have a deposit without selling the property. 

I am aware of the CML 6 months, sorry I should have originally highlighted that part. It doesn't apply from Sept 7th as that will be the 6 month timeframe so in essence if I sold now it would likely be around Sept earliest for completion anyway.

The house is nice is on a busy main road...for example we did did get an offer last week for £265k 15k over but when the lady explored the area she pulled out ( is a tad rough in some parts). 

I honestly think it will sell within 3 months but my main issue at mo is not relying on the house sale to purchase another. I suppose in an ideal world we would like to revert to interest only say for 12 months for argument sake and purchase our new property current one is vacant and for sale.

I hope I've made sense. I don't particularly want to BLT as I would rather move on with just have one property eventually. Obviously if this isn't doable I may have too. 

You can't really just switch it to interest only unfortunately. Lenders have very strict requirements around interest only. You could maybe ask your lender but I imagine doing so will go against you as you are bringing down your payments. Can't hurt to ask though. 

If you didn't have a mortgage it would be much easier but appreciate that isn't an option here. Bridging is maybe the best way but it's very pricey and if you sale doesn't go quickly (like in my case, 10 months into what should have been really easy and 3 buyers later!) I imagine you would be regretting it massively. 

Lucky1974

So if I decide to switch mortgage to a BTL and my outstanding balance is currently 160k, could I increase it to say 220k on an interest only BTL mortgage and pay off the 160k and have my equity that way as it would be needed to modernise the property throughout?

theoretica

Lucky1974 said:

So if I decide to switch mortgage to a BTL and my outstanding balance is currently 160k, could I increase it to say 220k on an interest only BTL mortgage and pay off the 160k and have my equity that way as it would be needed to modernise the property throughout?

The higher the LTV you ask for the more you will restrict your options - and may not have any at 90%.

housebuyer143

Lucky1974 said:

So if I decide to switch mortgage to a BTL and my outstanding balance is currently 160k, could I increase it to say 220k on an interest only BTL mortgage and pay off the 160k and have my equity that way as it would be needed to modernise the property throughout?

Yes, if you wanted to rent it instead you can take most the equity out so you have 20%-25% left in the property on the new valuation price and then use that money to fund your new purchase.

You can't take it all out as you need a deposit for the BTL. If the value has increased you should get your purchase price back and the loan paid back in full to your current lender.

You will get hit with the extra 3%or 4% stamp duty though, so that will eat away at you deposit slightly. 

sidneyvic

Your best bet is have some patience, although don't wait too long, your quick profit could turn to a substantial loss very quickly.....
Although owning two houses could be completely disastrous when the market turns...