Moving and trying to avoid a chain

discountdude_123

We're thinking about moving later this year (daughter will start school in 2027, so would be good to do this by end of 2026, as would be a different catchment area). We have a decent chunk left on our mortgage, but due to savings and inheritance have about enough to pay it off. Alternatively, we could use this cash as the deposit on the new house, and briefly own two, before selling the one we currently live in.

Is this second option silly? I've had a few friends recently get really messed up by being in a chain that either took ages or fell through, to the second option would be a way to try and avoid that. Also, my partner is from a different country and insists that chains don't really happen there (I think you get brief bridging mortgages, but I don't really understand), so is also worried about it being complicated/stressful.

Any thoughts on this topic would be helpful.

Sam_666

No, your 2nd option will not free you from chain risk. You see, chain means many links in line and you are just one. You being "not in chain" changes very little, unless your buyer is also "chain free", slim chance.

What happens in other countries is completly irrelavant, as you are not buying/sellin in "other country".

Also, payin-off morgage is only good idea if you are about to retire, there are better ways to invest monies, i.e. pension,etc.

eddddy

discountdude_123 said:

Alternatively, we could use this cash as the deposit on the new house, and briefly own two, before selling the one we currently live in.

It sounds like you're saying you'd briefly own 2 house and have 2 mortgages at the same time.

So the mortgage lender for the 2nd house will take into account that you will already have another mortgage to pay off on the first house.

In simplified terms, using made-up numbers, maybe a mortgage lender has indicated that they would lend you £200k. But if you're keeping an existing mortgage of £150k on the current house, they might only lend you about £50k on the second house.

Plus a 'standard residential' mortgage is for your primary residence. You can't really have 2 primary residences, so you'd need to discuss options with mortgage lenders/brokers.

Herzlos

How quickly are houses like your current one selling? If it's pretty quick then the bridging thing is viable, assuming the bank will lend on it.

I'd keep the money where it is now and get your current house listed ASAP. Then you can figure out what makes most sense based on how that sells and what the situation is like for the house you want to buy.

JIL

We did it. I asked for advice on here about 2019 April I think. I will see if I can find the original post.

ETA Is this crazy? — MoneySavingExpert Forum https://share.google/0kA1XpaVdsCN1DPZ9

We saw a house that was going through probate and lots of viewings. We knew it needed a lot of work. We had savings and a mortgage on our current property.

We put in an offer. Used a mortgage broker, who had done exactly the same thing. We paid higher rate Stamp duty.

When we got the second property, we were able to gut it, rewire, new central heating, plastering, extension and kitchen.

We then moved in, tidied up our old house, and sold it. Paid off the mortgage No capital gains as we moved within 9 months and the Stamp duty was refunded. You need to be aware of the two lots of council tax, insurance, utilities.

My only advice is to pay for an independent adviser. They know what lenders to go to and what information they will want. It was worth it for us. I love my new home.

RelievedSheff

Alternatively just find the shortest link either side of you that you possibly can.

We have first time buyers for our house and the vendors of the house we are buying are emigrating. So we have a very short chain.

That wasn't really what we were aiming for but that is how it has fallen. Just happened that the house we loved had no upper chain.

Albermarle

We have a decent chunk left on our mortgage, but due to savings and inheritance have about enough to pay it off. 

As a more general point, it can seem a good idea to pay off a mortgage, but it can often be a better idea to invest money for the future instead, like with a pension. Or at least do a bit of both.

BungalowBel

We bought our bungalow before selling our house, from the proceeds of an inheritance.

We completed on the bungalow in the April, then rewired, replastered, changed windows and doors, new floors in two rooms, laminate throughout, removed the garage, added a conservatory.

We moved in in September.Our house had been sold STC for about a month, we just waited for it to complete, but it meant we were able to move in at our leisure.

It did mean two lots of CT and insurance though!

No mortgage or stamp duty involved.

EssexHebridean

Ask yourself the question - what happens if "something" occurs in the world and you can't sell your current house quickly. Do the sums around what the ongoing costs are, and what the impact of not being able to claim back the additional stamp duty would be if the worst REALLY happened.

We sold our flat and bought a house a couple of years ago - for the whole time we'd lived in the flat (20 years) whenever one came up in our block in even vaguely decent condition it sold within days. Ours went on the market not long after the mini-budget in 2022, and the market had changed in a heartbeat. It took us 4 months to sell, and things haven't ever really recovered - our friend has just accepted an offer for hers (the first offer she's had) after 6 months.

Had we decided to buy then sell, that would have been a very concerning few months!

monkey-fingers

https://forums.moneysavingexpert.com/discussion/comment/81879678#Comment_81879678

Whilst I appreciate that might sound great on paper, the satisfaction of not owing anyone for me would be a far greater draw.

To the point where I'm considering making some ill advised decisions to do just this. It's the most important thing to many people.

grumpy_codger

Alternatively, we could use this cash as the deposit on the new house, and briefly own two, before selling the one we currently live in.

Is this second option silly?

Am I silly? That's what I've done to move stress-free and didn't regret. Luckily, the new hose was chain-free. The only difference was that I fully owned the old hose, so the question is whether you can get a second mortgage without paying the old one off.