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Buy Retirement Flat Before House Sale

My dilemma.  I was widowed about 18 months ago and need to downsize. I have found a retirement flat and would really like to buy.  Due to finding this property very quickly my house in not on the market yet but will be asp.  I have the vast majority of the funds to buy the flat but may have borrow some money, if my house does not sell very quickly. So in theory I would probably own 2 homes at the same time. What are the implications regarding this? Ideas on borrowing money short term until house is sold. I don't want too loose the opportunity of buying this retirement property. Should I look at companies that buy houses very quickly or is this a definite no, no. Is there any where I could seek free legal advice regarding this matter? CAB are always too busy.
Any advice received with thanks in advance 

Comments

  • My dilemma.  I was widowed about 18 months ago and need to downsize. I have found a retirement flat and would really like to buy.  Due to finding this property very quickly my house in not on the market yet but will be asp.  I have the vast majority of the funds to buy the flat but may have borrow some money, if my house does not sell very quickly. So in theory I would probably own 2 homes at the same time. What are the implications regarding this? Ideas on borrowing money short term until house is sold. I don't want too loose the opportunity of buying this retirement property. Should I look at companies that buy houses very quickly or is this a definite no, no. Is there any where I could seek free legal advice regarding this matter? CAB are always too busy.
    Any advice received with thanks in advance 
    Avoid using a house buying company like the plague. You can always reduce the price of your house yourself and pocket more than you would using a quick sale property. 

    If you buy the retirement property before you’ve sold your current home you’ll be subject to the higher rate of SDLT/LBTT/LTT but you’ll be able to reclaim it back once your house sells. 

    Perhaps post on the Mortgage & Endowments board to see if any of the mortgage brokers there have ideas on how to fund the difference. 
  • theoretica
    theoretica Posts: 12,227
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    Perhaps talk to a mortgage broker with experience in equity release and bridging loans? They should be able to give you an indication of how much it would cost.  And also to an estate agent about how fast your current house could realistically sell.  Remember you might need to pay two lots of council tax, insurance, utilities...
    But also, how often do retirement flats come up in the community you like?  If you miss this one, when is the next one likely to be?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
  • Yes, I can see all of these implications. Thats why I'm asking the questions. I would not need a mortgage. Flats like the one in question, coming up for sale, very rarely.
  • Yes, I can see all of these implications. Thats why I'm asking the questions. I would not need a mortgage. Flats like the one in question, coming up for sale, very rarely.
    You need some kind of finance to bridge the gap between buying the retirement flat and selling the house unless the vendor of th3 retirement flat is prepared to wait. Hence the suggestion you speak to a mortgage broker. 
  • youth_leader
    youth_leader Posts: 2,428
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    I would be very wary of buying a leasehold retirement flat.  I am also widowed and had to downsize and considered a McCarthy and Stone retirement apartment.  I then  found out that when I die my children would have to continue paying the very high maintenance charges until they managed to sell.  There are a lot of posts about it on this forum.

    If you have the funds I would recommend a freehold tiny house/bungalow instead. 
    £216 saved 24 October 2014
  • user1977
    user1977 Posts: 13,324
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     I would not need a mortgage. 
    But you also asked for "Ideas on borrowing money short term until house is sold." so presumably you don't have enough cash for the purchase currently? How much would you need to borrow? 
  • My sympathies for the loss of your husband.

    You need a bridging loan which are quite common----just seek professional opinion and guidance----if you don't want to pay for their services, look for one who will give an initial consultation free of charge. You obviously love the retirement home you want to buy, and I see no reason for any concern about buying such a property as long as you know whether it is part of a retirement "development" and, if so, there are service charges and how much; and if there is a management company and research their reputation.

    Do NOT sell to a "quick buy company".   Best wishes.
  • Thanks for your kind post.  I do appreciate the time and effort folk take to answer my questions. Its good to the look at all pitfalls involved in what I'm trying to achieve. Of course I will seek the correct legal and advise guidance before I continue with any transaction. 
  • I have a friend in a similar position but who needs to move quickly to a smaller property due to v poor and worsening health. She is think of a bridging loan but I have wondered whether equity release would be better. She has set her heart on a flat in a particular complex which I will assume is leasehold.  I am concerned that in the current climate she may not be able to sell her current property quickly, though she seems happy to sell at a loss. 
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