Two mortgages, one property?

HRH_MUngo

We took out a mortgage via a mortgage broker when we wanted to buy our bungalow.  We didn't want to have to rely on the sale of our house to fund the purchase.  We were in a similar position to yourselves.  We took out a £100k mortgage and paid the balance from our own funds. (Bungalow was £138k).

We paid the mortgage off once our house sold (I think we only paid one payment of the mortgage).

My advice is, see a mortgage broker.  They have access to mortgages that are not offered on the high street.

fudgecat

Some friends of ours, had a large camper van. They sold, were then cash buyers, and meanwhile lived in the camper. After buying, a health problem meant that they could no longer keep the camper, so they sold it. This might be a possible solution!

simon_or

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?

My parents were in a similar position, though in their early 70s, and had no problem buying the new house on a mortgage (to age 85 if I'm not wrong) based on their retirement income, and then doing up the old house and selling it once they had moved out.

They then paid off the mortgage in full at the end of the fixed period.

It was just a normal mortgage through the broker I've been using for my mortgages, not the equity release kind. Just speak to a good broker, should be fairly straightforward as long as you have sufficient pension or other income.