No smilies, no avatars, no flashing gifs. Just discuss the issues of the day, from last night's telly via football to science or philosophy.
Started by LittleMissMuffet on Jun 18, 2020 10:09:25 AM
Mortgage sanity check

House went on the market last week Thu - we had five viewings over the w/e and have accepted an offer 3k under the asking price.

We have identified a house we really, really like - asking price offered, current owner seems positive, but TBC.

However...

Previous
|
Next
|
Top
|
Bottom
Crayola - 18 Jun 2020 10:10:35 (#1 of 33)

... aliens ate my bank manager

LittleMissMuffet - 18 Jun 2020 10:11:13 (#2 of 33)

We are at the front of a six house chain, which could cause our desired house to fall through given they want to move ASAP.

We're looking at mortgage options to secure the house in the meantime until ours sells.

Yes, I'm researching, but just wanted thoughts from the hive mind.

What's the best option mortgage-wise to enable us to secure a (frankly massive) mortgage with no early repayment penalties to tide us over until ours sells - anyone had to do something similar? This obviously isn't an uncommon situation, just not one either of us has had to face for the last 15 years+.

LittleMissMuffet - 18 Jun 2020 10:11:29 (#3 of 33)

Ah you sod - I knew someone would beat me to it :-/

Crayola - 18 Jun 2020 10:13:07 (#4 of 33)

Sorry.

Actual advice would be that I suspect a 6 house chain will cause a lot of heartache.

Crayola - 18 Jun 2020 10:15:06 (#5 of 33)

Thinking about how long it took me in a 2 houser last time when someone else got gazumped, and the general slowness of solicitors combined with the complexities of offices having furloughed staff so fewer people to do some of the basic stuff, I would worry about the time it would take for your end and the people who want to move quickly getting frustrated and pulling out.

That was a long sentence, sorry.

TLDR: May well take too long for fast moving people

LittleMissMuffet - 18 Jun 2020 10:15:18 (#6 of 33)

Nae bother at all, I'd do exactly the same!

It's deffo going to be an issue, so I'm trying to persuade other half to take on a larger mortgage with no tie in rather than a fixed rate for a couple of years, which would cost silly money each month and a 2% / 3% early repayment charge.

Moschops - 18 Jun 2020 10:16:06 (#7 of 33)

Are bridging loans still an option?

LittleMissMuffet - 18 Jun 2020 10:17:13 (#8 of 33)

May well take too long for fast moving people

So there's no chain in front of the house we want, we found out today - so the onus will be on us to move quickly assuming our offer is actually accepted. We could afford the mortgage on paper for the entire amount, but it'd be eye watering and our house should sell quickly if the current buyer drops out - so it's just trying to find the most flexible / least relatively painful option mortgage-wise.

SaffronSunrise - 18 Jun 2020 10:18:59 (#9 of 33)

Is the security for the additional borrowing your existing property because of good equity?

Points towards existing lender on the info so far.

I'm not convinced you should be doing it, mind. Tbh.

Are you madly in love with what you want to buy?

tasselhoff - 18 Jun 2020 10:19:36 (#10 of 33)

Can't you refuse the offer and put your house back on the market?

Natascha - 18 Jun 2020 10:20:02 (#11 of 33)

Can you move out quickly, put most of your stuff into storage and live in a small rental for six months? Even if you have to move out of a small rental in under six months and are left with a couple of months to pay, that has to cost less than the costs of interest on a huge mortgage

E.g. - order of magnitude calculation: cost of storage each month around £100; cost of rental each month (for two people) around £1000; cost of moving stuff into and out of storage which is on top of costs of moving; around £3000 (possibly, this is the weakest guess).

Yersinia - 18 Jun 2020 10:20:26 (#12 of 33)

We had an overlap when we had two properties.

What we did, was get a Coventry offset mortgage, and then, when we sold the old flat, whop the money into the offset account.

Natascha - 18 Jun 2020 10:20:49 (#13 of 33)

OK, scratch that - you want to move out before your buyer wants to move in.

LittleMissMuffet - 18 Jun 2020 10:22:27 (#14 of 33)

Is the security for the additional borrowing your existing property because of good equity?

Equity in current home is half of target home value - as above, we can technically afford the new mortgage sans equity on paper, and we really really like the new place.

LittleMissMuffet - 18 Jun 2020 10:24:14 (#15 of 33)

So looks like a standard variable rate is our most flexible option in the short term, if we want to secure a move and can afford to wait a wee while for either the current buyer to catch up or put it back onto the market to re-sell hopefully more quickly.

Aaaaaaargh.

Ginmonkey - 18 Jun 2020 10:24:51 (#16 of 33)

So you want to buy the new house before you have sold yours? So essentially you will be asking for a mortgage to buy a "second home". How much finance do you need? Are you still making mortgage payments in the house you are selling? If not that might be more acceptable.

Also remember if you still own your first house when you buy the second you'll have to pay an extra whack of stamp duty.

xDiggy - 18 Jun 2020 10:28:30 (#17 of 33)

When I moved a couple of years ago I had a situation a bit like this and tried to work out if I could very briefly hold both properties. The double stamp duty thing in cash was like lol nope.

LittleMissMuffet - 18 Jun 2020 10:33:06 (#18 of 33)

So you want to buy the new house before you have sold yours? So essentially you will be asking for a mortgage to buy a "second home". How much finance do you need? Are you still making mortgage payments in the house you are selling? If not that might be more acceptable.

Yes, it'd technically be a 2nd home - but mortgage free as of last year.

Also remember if you still own your first house when you buy the second you'll have to pay an extra whack of stamp duty.

Indeed, that's another kicker - I think you can get some of that back if you sell within a certain time?

Ginmonkey - 18 Jun 2020 10:35:10 (#19 of 33)

I think so.

It's a gamble but If you love the new house it might be worth doing the figures and seeing if you can bear the risks - obvious risks might be first house failing to sell, a large expensive repair job coming up on one of the houses, job loss.

SaffronSunrise - 18 Jun 2020 10:43:13 (#20 of 33)

I was going to do a long wet blanket post but that doesn't seem for me to say, somehow.

I'd ask you to consider if you'd do this for a property you only like 1/3rd as much say.

And point out that new place might not even work out to be quite as great as you think now? vs a LOT of potential heartache.

So I am still trying, but will desist now.

Previous
|
Next
|
Top
|
Bottom
Check Subscriptions
|
Home » Advice