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    • Jaideco
    • By Jaideco 12th Jun 17, 12:16 PM
    • 1Posts
    • 0Thanks
    Can I complete a purchase within my existing mortgage tie-in period?
    • #1
    • 12th Jun 17, 12:16 PM
    Can I complete a purchase within my existing mortgage tie-in period? 12th Jun 17 at 12:16 PM
    I need some advice please.

    Two years ago, I relocated with work and remortgaged my old house as a BTL on a 2 year fixed rate. Since then my old house has been self-financing and I have been living in rented accommodation close to work. I have only recently felt settled enough in my new hometown to buy a new home here.

    I have an agreement in principle for a mortgage on a new home of similar value to the old one and for a remortgage of the old house to supplement my deposit on the new purchase.
    The problem is that I am expecting my new purchase to complete in about 10 weeks and my early repayment penalties on the BTL mortgage will continue to apply for about 14 weeks. Without the remortgage, I only expect to be able to contribute a 10% deposit and there is a significant difference between the rates at 85% LTV and 90% LTV.

    As I see it, my options are...
    1) Complete the new purchase in 10 weeks on 90% LTV and accept a higher fixed interest rate that would cost me around 4,000 extra over the next 5 years.
    2) Complete both new mortgages in 10 weeks, repay the BTL early and pay a 5,000 penalty.
    3) Try to drag out the purchase by another month and complete both new mortgages in 14 weeks time. This would mean that I might risk losing the house altogether and I really do not want to lose it.
    4) Complete both mortgages in 14 weeks but apply for 1 month's bridging finance that would allow the purchase to go through at 10 weeks. There would be high interest to pay and no guarantee that the finance would be available, this would take me back to option 3.
    5) Find some way to advance 15,000 for 30 days in order to make up my deposit on the new property to 15% until the equity is released from the old one. Unfortunately I have been informed that neither lender would consider the transactions to be connected if the new purchase happens before the remortgage. The new lender would consider this to be raising a deposit from debt (which is not allowed) and the BTL lender would consider this to be remortgaging to replenish savings (which is also not allowed).

    Has anyone tried to do anything like this before?
    How did you get around this?

    Thanks in advance for your help.

Page 1
    • dimbo61
    • By dimbo61 12th Jun 17, 5:37 PM
    • 9,879 Posts
    • 5,314 Thanks
    • #2
    • 12th Jun 17, 5:37 PM
    • #2
    • 12th Jun 17, 5:37 PM
    Delay the purchase of your new home
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