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    • JB123
    • By JB123 14th Sep 17, 3:25 PM
    • 4Posts
    • 1Thanks
    Borrowing money to buy a new house before selling old one.
    • #1
    • 14th Sep 17, 3:25 PM
    Borrowing money to buy a new house before selling old one. 14th Sep 17 at 3:25 PM
    We own a house (mortgage free) in London, and some time in the next year or two want to move away from London. Our house in London looks to be worth 150,000 to 275,000 more than the kind we'd want outside of London. Now if we just sell our house in london and buy one outside on the same day, this is simple. However I'd like to buy a new one first and then sell the old one (aiming to minimise the time to a month or two but knowing it could take a year or more to sell)... It makes it MUCH easier to buy what we want, and probably to sell when we don't have a chain. And we might want some work doing on a new place before moving in.

    What are our options to finance this? As I don't have any kind of mortgage on the existing property and the the ones we are looking to buy are about 3 times our combined salary (Plus we have some savings so would likely only need 2.5 times...) it would seem possible to get a mortgage on the new property. However I only would need it for a month or upto a couple of years. Value of security shouldn't be a problem as any mortgage would only be about 35% of the combined value of the properties. If we got a mortgage we would pay it off when we sell the old house most likely.

    Now one problem is that I will be 50 years old by then so won't be wanting a traditional 25 year mortgage. My partner (who I'm not married to at this point if it matters, but things could change by the time we do this) will be 37 and although she earns less earns a reasonable amount to pay any loan if I couldn't.

    So, what are our options to do this? Is it possible to get a loan for this kind of thing? How much would it likely cost? I guess we'd be looking at borrowing maybe 450,000

    Or am I better to forget it and just try to buy/sell at the same time and deal with the difficulties
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    • getmore4less
    • By getmore4less 14th Sep 17, 3:49 PM
    • 32,433 Posts
    • 19,489 Thanks
    • #2
    • 14th Sep 17, 3:49 PM
    • #2
    • 14th Sep 17, 3:49 PM
    edit: try again with the right numbers

    Deposit will be the key to getting a good rate and affordable payments till you sell.

    reverse in your numbers to get the bit needed.

    house is 3 times deposit is around 0.5 and mortgage 450k
    That's 90k + 450k 540k LTV 83.3%

    Should be able to get a mortgage around 1.75% over 20years. 2,200pm

    if you don't have the cashflow for that then you may qualify for a First direct offset mortgage which can be done interest only and once you sell you offset 100% and just leave it there costing nothing.

    the fee no fee options will depend on final details but payback of fees will be months not years with such a large loan.
    Last edited by getmore4less; 14-09-2017 at 4:01 PM.
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