Do I need to sell before moving?

rundmc-k

My wife and I are lucky enough to have paid off the mortgage on our current house. We are hoping to move but currently are not in a position to immediately put our house on the market.

Having said that, a very attractive house has come on the market and we are going for a viewing on Friday. We would potentially be able to keep our current house and still have a 20-25% deposit available to look for a mortgage on this hypothetical new house.

My question is though... is that crazy? Or relatively sensible? I know we'd have to pay extra second home stamp duty, but the hope would be to claim that back if we sell our current house within 3 years.
The idea would also be to only take on a mortgage that has no restriction on repayments.
Would the fact that mortgage rates are so high make this a silly plan though? Would what we pay in interest each month for a new mortgage make it much less logical than selling our house first and being able to effectively have 80% of the funds for a new house available then and there?

I hope that makes sense, and any help would be most appreciated.

patpalloon

Not silly but why would you not sell your house? Why hang on to it? You could rent it out but it's not great to be a landlord now. Plus house prices could fall meaning you might get less for your house if you don't sell now. You can still go ahead and buy the new house but I would sell yours and reclaim the stamp duty .

secla

Wouldn't say its silly, depends how much you like the new house and how long until you can sell your current house.
You will obviously have interest on mortgage payments + bills to pay for the empty house so i guess just work out what it will cost you and decide whether its worth it to you.
The only issue I can think of is if the house market plummets between buying and selling that could be an issue, But probably not likely in a short space of time

housebuyer143

Read here: https://forums.moneysavingexpert.com/discussion/comment/80348899#Comment_80348899

ProDave

Not silly at all.  It means you can buy the house you WANT and then sell the old one.

The alternative, that most people have to put up with, is you can't buy until you have a buyer for your old house, and by the time you get a buyer your dream house has sold to someone else, so you have to choose the best of whatever is on the market which may not be what you want.

All I would say is don't become a landlord, as soon as you have secured the purchase of your new house, put the old one on the market so you don't own two for very long.

Flugelhorn

good way of getting the house you want, get the work done on / decorate it etc and then move in - I have done it several times - just factor in the extra costs of running 2 places for a while. 

PS just thinking, did it with a mortgage a couple of the times and took out the mortgage on the main residence, buying the new one as cash - not sure that everyone does it like this and whether it is now the best way to do it, suspect others will know

Bigphil1474

OP - We have our house on the market, less than 2 weeks, had about 10 viewings so far but no offers. We found a house we both really love but unable to offer yet. Unfortunately they have now had an offer and are considering it. If they accept it, we'll have 'lost' the only house that the 2 of us both loved, so far. If I was in your shoes, I'd buy the house that you really want. (We wouldn't make an offer on a house that has already accepted an offer.)

vic_sf49

I did the same thing in 2015.

I wanted a property in a certain area, so didn't want to market mine then feel pressured into buying. 

Took 2 years to find the right place (mostly RM browsing, with about 5 viewings), at which point I put mine on the market, but I was proceeding on my purchase, without tying in the sale of mine. 

 I went for a variable mortgage, as there were no early repayment changes. 

Bought my new place in June 2015. Camped in one of the bedrooms while I painted the place. Moved my furniture across in July I think. Completed on old place in September. Paid off mortgage. 

jonnydeppiwish!

rundmc-k said:

My wife and I are lucky enough to have paid off the mortgage on our current house. We are hoping to move but currently are not in a position to immediately put our house on the market.

Having said that, a very attractive house has come on the market and we are going for a viewing on Friday. We would potentially be able to keep our current house and still have a 20-25% deposit available to look for a mortgage on this hypothetical new house.

My question is though... is that crazy? Or relatively sensible? I know we'd have to pay extra second home stamp duty, but the hope would be to claim that back if we sell our current house within 3 years.
The idea would also be to only take on a mortgage that has no restriction on repayments.
Would the fact that mortgage rates are so high make this a silly plan though? Would what we pay in interest each month for a new mortgage make it much less logical than selling our house first and being able to effectively have 80% of the funds for a new house available then and there?

I hope that makes sense, and any help would be most appreciated.

Currently in an identical position - for us, the ability to renovate whilst still having somewhere nice to live is worth the weight in interest payments!

We’ll probably take a mortgage out on both house though, one short term. 

EssexHebridean

It sounds like a perfectly reasonable plan in your situation so long as you have the additional money for not only the higher rate SDLT but also double sets of bills for a while. there is of course always the risk that you need to consider around what happens if your current home doesn't sell in the timescale to reclaim the SDLT - probably not likely, but still, one to chat through. 

rundmc-k

Thankyou everyone for your very helpful comments, it's certainly reassuring that it's a reasonable plan to keep the current home whilst buying somewhere else.

So with regard making an offer on a new property. As I haven't moved since I was a FTB 17 years ago, I'm not fully sure... should I approach my bank about a mortgage before getting to the point of making an offer on a house, or only after I've made an official offer? If my deposit/earnings etc are all in order, would a bank be likely to make the mortgage available within, say, 1 month, and would this be a timescale I should suggest to a seller?