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Buying a new home before selling current home?

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kevin_wevin
kevin_wevin Posts: 14 Forumite
in House buying, renting & selling
Hi there,

Looking for a bit of advice. I currently own a flat - the mortgage outstanding is about £110k and the valuation of the flat is roughly £170k. I had a 2 year fixed term mortgage but the 2 years is now finished so its on the variable rate.

I want to move into a new flat by the end of the year. I think it would be really stressful and a massive hassle to sell my current place and buy a new place at the same time. Is there any big disadvantage if i was to buy a new flat in the next few weeks and aim to sell the flat im currently in by the end of the year? Even though I plan to sell the current place very soon after buying the new place I'm guessing its a bigger risk for the bank and they would require a bigger deposit?

I have about £40k saved up and the place that i want to bid for is going at offers over £195k. Its in Edinburgh and they usually go quite a bit higher than the asking price, so not sure if thats enough of a deposit.

Anyone been in this situation before and can shed any light on how it went?

Thanks

Kevin

Comments

  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    Lenders won't be keen to take the risk of you selling your current place quickly, so the question is can you easily afford to have £270k+ of mortgages plus the running costs for two flats?
  • campbell19925
    campbell19925 Posts: 203 Forumite
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    What if the first doesn't sell for a year or two?

    Do you have enough funds to cover the mortgage repayments? You need to consider that
  • zagubov
    zagubov Posts: 17,886 Forumite
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    kevin_wevin wrote: »
    Hi there,

    Looking for a bit of advice. I currently own a flat - the mortgage outstanding is about £110k and the valuation of the flat is roughly £170k. I had a 2 year fixed term mortgage but the 2 years is now finished so its on the variable rate.

    I want to move into a new flat by the end of the year. I think it would be really stressful and a massive hassle to sell my current place and buy a new place at the same time. Is there any big disadvantage if i was to buy a new flat in the next few weeks and aim to sell the flat im currently in by the end of the year? Even though I plan to sell the current place very soon after buying the new place I'm guessing its a bigger risk for the bank and they would require a bigger deposit?

    I have about £40k saved up and the place that i want to bid for is going at offers over £195k. Its in Edinburgh and they usually go quite a bit higher than the asking price, so not sure if thats enough of a deposit.

    Anyone been in this situation before and can shed any light on how it went?

    Thanks

    Kevin

    This will be very expensive and complicated. Easier to sell before or at the same time as you buy the new place. Owning two houses at the same time lays you open to additional taxes and a lot of trouble getting the second mortgage unless you have an exceptionally generous income.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
  • kleapatra
    kleapatra Posts: 213 Forumite
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    Pretty sure you can’t have 2 residential mortgages (at the same time). That’s what I was told when I wanted to complete on my purchase a day before the sale completed anyway (I didn’t need any funds from the sale in order to fund the purchase)
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    kleapatra wrote: »
    Pretty sure you can’t have 2 residential mortgages (at the same time).
    Pretty sure you can. I've had them overlap by a week or so, and it is possible to borrow for a second home. But for most people it isn't going to be affordable (in the eyes of the average lender) to be doing it for an indefinite period.
  • DavidT67
    DavidT67 Posts: 390 Forumite
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    Also you'll need to budget for the 3% second home stamp duty surcharge on the new property purchase and then claim it back as and when the first house sells, which needs to be within 36 months of the purchase. And don't expect HMRC to be in a hurry with the refund...
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    DavidT67 wrote: »
    Also you'll need to budget for the 3% second home stamp duty surcharge on the new property purchase and then claim it back as and when the first house sells, which needs to be within 36 months of the purchase. And don't expect HMRC to be in a hurry with the refund...
    18 months and Revenue Scotland here, but otherwise the same applies...
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    I agree that it would be really stressful and a massive hassle to sell your current place and buy a new place at the same time.

    However, I think it would be even more hassle and stressful to buy a new flat in the next few weeks and aim to sell the flat you're currently in by the end of the year.
    You'll have all the normal stress and hassle plus double mortgage, buyers who know you are carrying two mortgages and use that as a lever to get you to drop your price, a big wodge of extra SDLT to find and needimgnto claim it back, and a deadline to sell after which time you cannot reclaim it.
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