Help! Face losing 20K deposit.

daverave7

Hi All,

My partner and myself put a 20K deposit on an off-plan appartment 2 years ago, priced at 200K. The appartment is now built and I anticipate that the developers will ask to complete in 6 weeks time. We accepted an offer of 93K on our current property last January, but this has fallen through due to a first time buyer being refused a mortgage low down the chain. So it is back on the market but I think highly unlikely to get a sale in 6 weeks. So what are our options? Can we get a mortgage for the flat and run our existing mortgage at the same time (i.e. 2 mortgages on 2 properties)? Or can we have one large mortgage on 2 properties? Or 2 separate mortgages under 2 different names? Or I've even heard about remortgaging our current property and getting a buy to let mortgage? Do bridging loans still exist?

Our finances are as follows,

I earn 35K pa, but I have a total of 37K of debt (in CC's and graduate loan)

My partner earns 30K pa, no debt.

We have already paid 20K deposit on a 200K property.

My partner, has 40K left on her exisiting mortgage for the current property up for sale(valued at 95K - 55K Equity).

What's the best way out of this mess!? We don't want to face losing the 20K deposit on the appartment.

Many thanks for taking time to read - any help or suggestions will be much appreciated!

firesidemaid

if the apartment was valued at 200k then, what is it worth now?

if you have had 2 years to plan all of this have your other debts been going up or down?

if the figures stack up, the best bet might be to rent out your current house to cover a small btl mortgage and buy the new one with your own mortgage. have you got a mortgage arranged for the new property? for what amount?

it sounds like you need an IFA or Mortgage Advisor to advise you on the whole package.

daverave7

firesidemaid wrote: »

if the apartment was valued at 200k then, what is it worth now?

if you have had 2 years to plan all of this have your other debts been going up or down?

if the figures stack up, the best bet might be to rent out your current house to cover a small btl mortgage and buy the new one with your own mortgage. have you got a mortgage arranged for the new property? for what amount?

it sounds like you need an IFA or Mortgage Advisor to advise you on the whole package.

Thanks! The same build appartments with the same spec are currently on sale with various estate agents for 230K so I assume they have gone up in value. (but not necessarily!)

My debts have gone down approx 5K in the last 2 years.

We've been offered a 160K mortgage at a rate of 5.59 % for 5 years with Abbey, but this was assuming the house would be sold.

firesidemaid

so you need to increase the mortgage offer by 20k, is that right?

i would hope you could get this based on rental income from the other property.

your other option, on afforability, would be part interest-only for a while until you sell the second house.

also, as it's a new financial year are either/both your wages about to go up which would help with the income multiples.

daverave7

firesidemaid wrote: »

so you need to increase the mortgage offer by 20k, is that right?

i would hope you could get this based on rental income from the other property.

your other option, on afforability, would be part interest-only for a while until you sell the second house.

also, as it's a new financial year are either/both your wages about to go up which would help with the income multiples.

Yes, my wage will go up which could help.

Would we have to go down the road of getting a buy to let mortgage? Are we allowed to run 2 residential mortgages on 2 properties? Ideally, we would release 40 K of equity from the current mortgage... subject to our lender agreeing to release this! Then use 20 K to increase our deposit to 20 %, and the other 20 K to wipe some debt to bring in line our affordability. Anyone see any problems with this plan? Thanks

firesidemaid

one prob. borrowing money from the property to pay off the debt you are effectively securing that debt against your property.

UK007BullDog

Go and see a broker. A BTL mortgage on your old to release equity and maybe a little extra to repay some of your debts. Then carry on with your Abbey mortgage. But you need to see a broker asap.

UK007BullDog

oh and you need to find out what potential conservative rental you could get for your old place.

Dan_Collins_2

Yep, UK007Bulldog is right, raise the money and let it out. You just have to remember that it is not 2006 anymore. Things have changed and rates will be higher. Also be careful on the new property some lenders have restricted lending.

I am afraid you are a victim of the so called "crunch" and I think this case shows why off plan exchanges should be banned.

jill2002

If you have to keep your existing property, you may need to raise some extra funds to use as a deposit on the new build flat. If you are taking your new mortgage with Abbey, the maximum LTV on this type of property is now 75%.

sarkin

This is going to be a tough one lots of lenders looking for 25% deposit on all property built within the last 12 months.

Have you spoken to a broker yet