Two mortgages, one property?

Allanon

Sorry this is long but I wanted to try and give as much info as possible. I'm not even sure it's in the right place so admins, feel free to move if necessary.

We are both 64, both retired, and my wife has developed a medical condition that necessitates a move to a bungalow, and the sooner, the better.

The problem is, bungalows are so rare here that they are selling within hours of being put on the market. We’ve seen two that would be absolutely perfect for us, but both have been sold to people who are not in a chain and are basically cash buyers, with money in the bank ready to go, whereas we still have to sell our existing house.

In the old days, I suppose an answer to this would have been to take out a ‘bridging loan’ but they are very expensive and you can very quickly cause yourself a lot of financial grief, so that’s a non-starter for us.

Our current house is mortgage-free, having paid that off a few years ago. We have no kids or anyone to leave a legacy to, so every penny of its £210k valuation (minus fees, of course) is available to us.

My question is:

Is it possible to have two mortgages – or a mortgage and some other sort of personal loan - on the same property at the same time, in the short term?

We’ve been told by our building society that we can have an ‘Over 55s Lifetime Mortgage’ of up to 36% of the value of our new place, when we find one. The bungalows we’ve seen so far have been around the £285k mark, so 36% of that is around £102k (£102,600 to be exact).

We have £60k of Premium Bonds that we can cash in to use as a deposit, so that leaves us £123k short, to be made up by either a ‘standard’ mortgage or some other form of loan.

As soon as our house sells, we would then pay that mortgage or loan off straight away and buy Premium Bonds again, leaving us with just the Over 55s Lifetime Mortgage.

In summary, the point of all this is to put us in a position where we can say that we are not in a chain and that we are basically cash buyers ready to go, with no holdups. Our current house can also then be marketed as ‘vacant possession’ with no chain.

Is this viable and if so, what’s the best way of going about it?

hazyjo

You'd be far better off either getting in with the agents so you're first called before the properties hit the market, or selling and renting for 6+ months so you're chain free.

woodpeckerx

hazyjo said:

You'd be far better off either getting in with the agents so you're first called before the properties hit the market, or selling and renting for 6+ months so you're chain free.

100% agreed, aren't these lifetime mortgages just a form of equity release with higher interest rates and possibly high early repayment charges?

SDLT_Geek

Allanon said:

Sorry this is long but I wanted to try and give as much info as possible. I'm not even sure it's in the right place so admins, feel free to move if necessary.

We are both 64, both retired, and my wife has developed a medical condition that necessitates a move to a bungalow, and the sooner, the better.

The problem is, bungalows are so rare here that they are selling within hours of being put on the market. We’ve seen two that would be absolutely perfect for us, but both have been sold to people who are not in a chain and are basically cash buyers, with money in the bank ready to go, whereas we still have to sell our existing house.

In the old days, I suppose an answer to this would have been to take out a ‘bridging loan’ but they are very expensive and you can very quickly cause yourself a lot of financial grief, so that’s a non-starter for us.

Our current house is mortgage-free, having paid that off a few years ago. We have no kids or anyone to leave a legacy to, so every penny of its £210k valuation (minus fees, of course) is available to us.

My question is:

Is it possible to have two mortgages – or a mortgage and some other sort of personal loan - on the same property at the same time, in the short term?

We’ve been told by our building society that we can have an ‘Over 55s Lifetime Mortgage’ of up to 36% of the value of our new place, when we find one. The bungalows we’ve seen so far have been around the £285k mark, so 36% of that is around £102k (£102,600 to be exact).

We have £60k of Premium Bonds that we can cash in to use as a deposit, so that leaves us £123k short, to be made up by either a ‘standard’ mortgage or some other form of loan.

As soon as our house sells, we would then pay that mortgage or loan off straight away and buy Premium Bonds again, leaving us with just the Over 55s Lifetime Mortgage.

In summary, the point of all this is to put us in a position where we can say that we are not in a chain and that we are basically cash buyers ready to go, with no holdups. Our current house can also then be marketed as ‘vacant possession’ with no chain.

Is this viable and if so, what’s the best way of going about it?

If you buy your new home before you sell your old one, you will have to allow for the extra stamp duty.  If you are buying in England that would be an extra 3% SDLT.

user1977

Standard residential mortgage lenders expect to have a first-ranking charge over the property (i.e. first bite at the cherry in a repossession sale), so you can't have more than one of them. And they're generally averse to you borrowing other funds to make up the purchase price. Taking out further secured loans after purchase might be feasible, but that's not going to help you buy the property in the first place.

Allanon

woodpeckerx said:

hazyjo said:

You'd be far better off either getting in with the agents so you're first called before the properties hit the market, or selling and renting for 6+ months so you're chain free.

100% agreed, aren't these lifetime mortgages just a form of equity release with higher interest rates and possibly high early repayment charges?

Yes, it is equity release but the interest rate we start at is fixed for life and we can opt to just pay interest only. They only get their money back when the last one of us dies or goes into long-term care. We can also release more equity as time goes on, so it's ideal for us. I think you're maybe getting confused with the 'other' mortgage/loan, which I imagine would have an early repayment charge.

Allanon

SDLT_Geek said:

Allanon said:

Sorry this is long but I wanted to try and give as much info as possible. I'm not even sure it's in the right place so admins, feel free to move if necessary.

We are both 64, both retired, and my wife has developed a medical condition that necessitates a move to a bungalow, and the sooner, the better.

The problem is, bungalows are so rare here that they are selling within hours of being put on the market. We’ve seen two that would be absolutely perfect for us, but both have been sold to people who are not in a chain and are basically cash buyers, with money in the bank ready to go, whereas we still have to sell our existing house.

In the old days, I suppose an answer to this would have been to take out a ‘bridging loan’ but they are very expensive and you can very quickly cause yourself a lot of financial grief, so that’s a non-starter for us.

Our current house is mortgage-free, having paid that off a few years ago. We have no kids or anyone to leave a legacy to, so every penny of its £210k valuation (minus fees, of course) is available to us.

My question is:

Is it possible to have two mortgages – or a mortgage and some other sort of personal loan - on the same property at the same time, in the short term?

We’ve been told by our building society that we can have an ‘Over 55s Lifetime Mortgage’ of up to 36% of the value of our new place, when we find one. The bungalows we’ve seen so far have been around the £285k mark, so 36% of that is around £102k (£102,600 to be exact).

We have £60k of Premium Bonds that we can cash in to use as a deposit, so that leaves us £123k short, to be made up by either a ‘standard’ mortgage or some other form of loan.

As soon as our house sells, we would then pay that mortgage or loan off straight away and buy Premium Bonds again, leaving us with just the Over 55s Lifetime Mortgage.

In summary, the point of all this is to put us in a position where we can say that we are not in a chain and that we are basically cash buyers ready to go, with no holdups. Our current house can also then be marketed as ‘vacant possession’ with no chain.

Is this viable and if so, what’s the best way of going about it?

If you buy your new home before you sell your old one, you will have to allow for the extra stamp duty.  If you are buying in England that would be an extra 3% SDLT.

Wow, I didn't know that, thanks very much. That's basically going to kibosh the idea then.

Allanon

hazyjo said:

You'd be far better off either getting in with the agents so you're first called before the properties hit the market, or selling and renting for 6+ months so you're chain free.

Yes, I realise that and we already are registered with all the agents but we aren't the only ones, which is where this idea falls down. Plus, our house is on the market and renting may well be a possibility, but we have to sell this one first and the medical need to get in a bungalow is quite urgent - hence the need to become chain free.

Flugelhorn

Allanon said:

SDLT_Geek said:

Allanon said:

Sorry this is long but I wanted to try and give as much info as possible. I'm not even sure it's in the right place so admins, feel free to move if necessary.

We are both 64, both retired, and my wife has developed a medical condition that necessitates a move to a bungalow, and the sooner, the better.

The problem is, bungalows are so rare here that they are selling within hours of being put on the market. We’ve seen two that would be absolutely perfect for us, but both have been sold to people who are not in a chain and are basically cash buyers, with money in the bank ready to go, whereas we still have to sell our existing house.

In the old days, I suppose an answer to this would have been to take out a ‘bridging loan’ but they are very expensive and you can very quickly cause yourself a lot of financial grief, so that’s a non-starter for us.

Our current house is mortgage-free, having paid that off a few years ago. We have no kids or anyone to leave a legacy to, so every penny of its £210k valuation (minus fees, of course) is available to us.

My question is:

Is it possible to have two mortgages – or a mortgage and some other sort of personal loan - on the same property at the same time, in the short term?

We’ve been told by our building society that we can have an ‘Over 55s Lifetime Mortgage’ of up to 36% of the value of our new place, when we find one. The bungalows we’ve seen so far have been around the £285k mark, so 36% of that is around £102k (£102,600 to be exact).

We have £60k of Premium Bonds that we can cash in to use as a deposit, so that leaves us £123k short, to be made up by either a ‘standard’ mortgage or some other form of loan.

As soon as our house sells, we would then pay that mortgage or loan off straight away and buy Premium Bonds again, leaving us with just the Over 55s Lifetime Mortgage.

In summary, the point of all this is to put us in a position where we can say that we are not in a chain and that we are basically cash buyers ready to go, with no holdups. Our current house can also then be marketed as ‘vacant possession’ with no chain.

Is this viable and if so, what’s the best way of going about it?

If you buy your new home before you sell your old one, you will have to allow for the extra stamp duty.  If you are buying in England that would be an extra 3% SDLT.

Wow, I didn't know that, thanks very much. That's basically going to kibosh the idea then.

you get the 3% back though when you sell the first house - I did this and the money was back in my account within 2-3 weeks of sending the form to HMRC

hazyjo

Allanon said:

hazyjo said:

You'd be far better off either getting in with the agents so you're first called before the properties hit the market, or selling and renting for 6+ months so you're chain free.

Yes, I realise that and we already are registered with all the agents but we aren't the only ones, which is where this idea falls down. Plus, our house is on the market and renting may well be a possibility, but we have to sell this one first and the medical need to get in a bungalow is quite urgent - hence the need to become chain free.

Being registered won't mean much. They'll have to know you. Your needs are specific. They should be remembering you and ringing before it hits the market.

If there are others looking for exactly the same thing (prob not that many!) and they're getting first dibs, then great, they'll buy and you'll soon be top of their calling list.

So actually you don't appear have a buyer, prob not as much to do with "not being in a chain" as you think. Not many will take an offer seriously until you have a buyer. Some won't even let you view! If you want some advice, put your listing up and people can advise to help you sell quicker. Although at the end of the day, it'll be down to price.

Once you have a buyer, then start looking...

Good luck.

UnderOffer

How long has your house been on the market? You need this under offer before viewing anything, so that any properties you like and want to offer on the vendor can see you as proceedable.