Short term mortgage?

acamon

Hi,

I'm looking for a mortgage in a bit of a unusual situation and I was wondering if any of you fine fellows could give me some advice.

I'm trying to sell a property (valued at £300k) which I own outright (no mortgage). With part of the sale money I'm intending to setup up a business in Germany. Unfortunately, the house has been on the market for 4 months without any serious offers. I'm doing things to try and encourage the sale (redecorating, change estate agents, etc) but the dropping value of the pound to euro means that every month it goes unsold i'm losing thousands when I finally exchange. And besides that, I'm eager to get to Germany and get my project started.

So, it occurred to me that if I could get a mortgage on the property for, say, 50% of the value I could get some Euros before they become even more expensive and get my German undertaking underway.

There are two problems that I can see. First, I won't have a income for a while as I get my business started (and I don't have one at moment). I would put aside some of the 50% to service the repayments, but I would imagine this will put off lenders Secondly, once the house finally sells I would want to pay the mortgage off in full. Obviously I wouldn't want to pay large fees for this, but presumably some amount is inevitable.

So, I guess I was interested in hearing you guys opinion. I'm not very experienced with mortgages. Is this plan totally unfeasible? Will it be too expensive? If I had exchange the 300k 4 months ago I would have got 45,000euros more than I would get today. So, if the pound continues to fall I could save a lot of money buying some of my euros now, even with some penalties for early payment. Maybe?

Any advice would be hugely appreciated,

Alan

Lipstick_2

You could consider a buy to let mortgage and rent it out

homer_j_3

You could look at a buy to let mortgage as Lipstick says but if you do not intend to let the property out then this is a no go.

An alternative but more expensive option may be to arrange some bridging finance but that will be costly.

AndrewSmith

Bridge or short term finance would be on the face of it the most appropriate method.

There are companies out there at the moment with rates as low as 8.25%PA for bridging finance. Just watch the entry and exit fees though, can be a bit steep on some deals.

You also need to look t the type of bridging finance you need, for example closed or open bridging. There are different cost implications for both.

Mutton_Geoff

I don't think the Euro will strengthen much more than it has, so although it's dropped recently, I wouldn't be panicked into borrowing because of that.

Have you spoken to your bank? They could possibly arrange a loan with security.