Buying another house before selling current home?
Discussion
Hi everyone
Long time lurker, first time poster so be gentle, maths is not my strong point!
I am not very worldly wise in relation to money and numbers, so a bit of guidance please?
We have got our current home on the market, and have got our eye on another nearby. Current house is on for £315k, the one we would like to buy is 450k. We have an outstanding mortgage of 105k. I earn 40k, and my wife earns 50k, both in stable jobs we have 30k in savings., 2 school age kids. Debt, apart from mortgage, 10k on a loan, for my Caterham.
The house we are looking at is nearby, and we know the owners. It has been sold twice, and fallen through at late stages, but is still getting plenty of viewings. Ours is recently on the market. There is nothing else in the area, for our price range, that remotely ticks our boxes. I'm getting worried that we will miss out on the house because someone will offer on it prior to us receiving an offer on ours, and so I was wondering if there was any viable alternative options for us other than to sit it out and wait for an offer on this place? Would the numbers stack up for us to remortgage temporarily, in order to buy the other one and get some breathing space to sell this place? Or am I wildly out of touch?
10 years ago, when we bought this place, we kept the old one on for a while and rented it out before selling it. It was done via a broker so I don't remember much detail, and I appreciate that the world looks very different now! I don't really want to rent this place out if I can help it, or even know if it would be feasible (although probably not through First Direct, who we are on a fixed rate with for 2 more years. The sellers at the other place have got their eye on an empty property.
I'd welcome your thoughts. Many thanks.
Long time lurker, first time poster so be gentle, maths is not my strong point!
I am not very worldly wise in relation to money and numbers, so a bit of guidance please?
We have got our current home on the market, and have got our eye on another nearby. Current house is on for £315k, the one we would like to buy is 450k. We have an outstanding mortgage of 105k. I earn 40k, and my wife earns 50k, both in stable jobs we have 30k in savings., 2 school age kids. Debt, apart from mortgage, 10k on a loan, for my Caterham.
The house we are looking at is nearby, and we know the owners. It has been sold twice, and fallen through at late stages, but is still getting plenty of viewings. Ours is recently on the market. There is nothing else in the area, for our price range, that remotely ticks our boxes. I'm getting worried that we will miss out on the house because someone will offer on it prior to us receiving an offer on ours, and so I was wondering if there was any viable alternative options for us other than to sit it out and wait for an offer on this place? Would the numbers stack up for us to remortgage temporarily, in order to buy the other one and get some breathing space to sell this place? Or am I wildly out of touch?
10 years ago, when we bought this place, we kept the old one on for a while and rented it out before selling it. It was done via a broker so I don't remember much detail, and I appreciate that the world looks very different now! I don't really want to rent this place out if I can help it, or even know if it would be feasible (although probably not through First Direct, who we are on a fixed rate with for 2 more years. The sellers at the other place have got their eye on an empty property.
I'd welcome your thoughts. Many thanks.
Since Mystic Meg isn't a user on this site, I'll have a crack at telling the future. If the worst happens, there will be a recession, mass job losses and lockdown. It will be a real difficulty to sell a house and it may take 2 years for things to sort out with massive increases in taxes and cuts to public services.
How would you feel if this was true?
How would you feel if this was true?
Crossbill said:
Current house is on for £315k, the one we would like to buy is 450k. We have an outstanding mortgage of 105k. I earn 40k, and my wife earns 50k, both in stable jobs we have 30k in savings., 2 school age kids. Debt, apart from mortgage, 10k on a loan, for my Caterham.
Does that equate to taking on a £210k mortgage on an income of £90k?You could deal on the basis you need to sell yours before to buy.
The only other alternative, is buy that house get a new mortgage rather than porting over where you may need to pay exit fees depending on your deal and also pay stamp duty on the house if it applies.
Personally, i'd try and deal on selling yours before you move into theirs, you could purchase and just push the completion date as long as possible.
The only other alternative, is buy that house get a new mortgage rather than porting over where you may need to pay exit fees depending on your deal and also pay stamp duty on the house if it applies.
Personally, i'd try and deal on selling yours before you move into theirs, you could purchase and just push the completion date as long as possible.
I'd repeat the caution of others but I've done it myself.
Sarnie of this parish may well be able to give specifics on your situation and seems to be very helpful for mortgage advice.
If considering a new mortgage then remember to build in flexibility in the product to allow a large capital repayment when house no.1 sells.
Also consider scenarios of house no.1 dropping in value significantly or indeed not selling. Could it be let, Would it be a disaster etc etc.
2nd home stamp duty can be reclaimed as stated above but it's 3yrs you (currently) have.
Good luck with your plans.
Sarnie of this parish may well be able to give specifics on your situation and seems to be very helpful for mortgage advice.
If considering a new mortgage then remember to build in flexibility in the product to allow a large capital repayment when house no.1 sells.
Also consider scenarios of house no.1 dropping in value significantly or indeed not selling. Could it be let, Would it be a disaster etc etc.
2nd home stamp duty can be reclaimed as stated above but it's 3yrs you (currently) have.
Good luck with your plans.
Thanks everyone. House has been on the market a week, so it's early days. No crystal ball here, and I'm generally cautious with money, so I'm just investigating ideas at the moment, as I'm sure things have moved on since my last house buying experience. I know Sarnie has helped many on here, as I've been lurking for a long time, but was reluctant to at this stage as I wouldn't want to waste his time if the whole idea was dead in the water. So from I can gather so far it MAY be possible, but not necessarily wise?
You’ll have to take a combined mortgage of (450+315-210-30=)525k
+ you need to add stamp duty and other legal/moving costs on top say another 25k which would take the total to 550k.
Which would be 6.1 times your combined income. Most banks would go only up to 4.75.
Mortgage won’t be straight forward but a good mortgage advisor can help you with options.
It’ll be a big risk like others have already called out.
You can probably make the math work by assuming worst case scenario of keeping both houses and renting out the current one.
Think HARD if you want to take the risk v/s how badly you want the other house ( or would you get one similar in due course without this risk )?
+ you need to add stamp duty and other legal/moving costs on top say another 25k which would take the total to 550k.
Which would be 6.1 times your combined income. Most banks would go only up to 4.75.
Mortgage won’t be straight forward but a good mortgage advisor can help you with options.
It’ll be a big risk like others have already called out.
You can probably make the math work by assuming worst case scenario of keeping both houses and renting out the current one.
Think HARD if you want to take the risk v/s how badly you want the other house ( or would you get one similar in due course without this risk )?
Edited by Langleyuser on Monday 7th September 22:22
Thanks everyone. I know it’s early days, I’m just thinking ahead really. Sometimes it’s nice to have a Plan B! The area we live in is quite rural and houses like this one in our budget rarely come on the market, and I know the area very well, so I’m just trying to do what I can to nail down the deal.
I know First Direct wouldn’t be viable for this so it would mean looking at alternative mortgages with other providers, which is a crazy, scary world for a simple lad like me!
I don’t really want to rent this place out, although the market is strong here and it’s a 5 bed, 2 bathroom house with garden, garage etc so would appeal to families. It would just be a stopgap measure to enable me to sell this place.
I wasn’t sure who I would approach to ask for advice like this to be honest, hence me posting here.
I know First Direct wouldn’t be viable for this so it would mean looking at alternative mortgages with other providers, which is a crazy, scary world for a simple lad like me!
I don’t really want to rent this place out, although the market is strong here and it’s a 5 bed, 2 bathroom house with garden, garage etc so would appeal to families. It would just be a stopgap measure to enable me to sell this place.
I wasn’t sure who I would approach to ask for advice like this to be honest, hence me posting here.
We did this a couple of years ago. Used a broker and went via Halifax who were willing to take on the scenario on understanding we would sell old house within six months, ideally one from our perspective.
The chain beneath our old house was 2 and took almost 4 months. That was an expensive time, tho the risk was low really as most of the mortgage payments came back to us 4 month later.
Was a bit stressful as my contract work dried up for longer than the whole transition.
Maybe you could pay a deposit to the selling vendor so they agree to wait for you to sell?
The chain beneath our old house was 2 and took almost 4 months. That was an expensive time, tho the risk was low really as most of the mortgage payments came back to us 4 month later.
Was a bit stressful as my contract work dried up for longer than the whole transition.
Maybe you could pay a deposit to the selling vendor so they agree to wait for you to sell?
This thread is useless without the rightmove links.
My parents relocated with Dads job years ago, and the relocation included a 12 month bridging loan. I believe it wasn't cheap, but as he wasn't paying they priced their house not to sell immediately. They had an offer from someone who had to sell first, and accepted it in principle, but said if anyone offered 5% more they'd review it. My mum went around as a secret reviewer, and then gave them some selling tips.
My son and his fiancee are looking to move. They have decided to convert the mortgage on her flat to a btl because the yeild will be good. (I have experience of the rental market, but not in thier area)
And it won't impact the amount they can get for a residential mortgage. It does impact the stamp duty, but they have a spreadsheet.
My parents relocated with Dads job years ago, and the relocation included a 12 month bridging loan. I believe it wasn't cheap, but as he wasn't paying they priced their house not to sell immediately. They had an offer from someone who had to sell first, and accepted it in principle, but said if anyone offered 5% more they'd review it. My mum went around as a secret reviewer, and then gave them some selling tips.
My son and his fiancee are looking to move. They have decided to convert the mortgage on her flat to a btl because the yeild will be good. (I have experience of the rental market, but not in thier area)
And it won't impact the amount they can get for a residential mortgage. It does impact the stamp duty, but they have a spreadsheet.
If you already own a home and buy another, you will have to pay 3% additional Stamp Duty over and above the normal rate on the purchase price of the second home. If the second home becomes your main residence within three years of the date of the purchase, you can apply to have the extra Stamp Duty refunded.
Thanks everyone. I don’t really want to post the links. Thanks for the stamp duty reminder.
I know nothing about bridging loans and will investigate further, I had actually considered offering some kind of deposit but wasn’t really sure if it was something I could have drawn up without a lot of complexity, and I’m not sure the vendors would go for it anyway, as they have their eye on an empty property in a different part of the country but are scared that they will lose it. They are in regular touch with us, we know them vaguely, so they understand our position well.
It sounds really like I need to sit on my hands and see what happens for a bit, it’s early days. Maybe I should consider having a chat with someone like Sarnie if this drags on for a long while, or the vendors circumstances change.
I know nothing about bridging loans and will investigate further, I had actually considered offering some kind of deposit but wasn’t really sure if it was something I could have drawn up without a lot of complexity, and I’m not sure the vendors would go for it anyway, as they have their eye on an empty property in a different part of the country but are scared that they will lose it. They are in regular touch with us, we know them vaguely, so they understand our position well.
It sounds really like I need to sit on my hands and see what happens for a bit, it’s early days. Maybe I should consider having a chat with someone like Sarnie if this drags on for a long while, or the vendors circumstances change.
Eric Mc said:
If you already own a home and buy another, you will have to pay 3% additional Stamp Duty over and above the normal rate on the purchase price of the second home. If the second home becomes your main residence within three years of the date of the purchase, you can apply to have the extra Stamp Duty refunded.
Just to clarify Eric, you can only apply for the stamp duty refund if you sell the first home right?Crossbill said:
Maybe I should consider having a chat with someone like Sarnie if this drags on for a long while, or the vendors circumstances change.
Please feel free to drop me a line or give me a call, more than happy to chat through options with you, no problem at all, lots of people make contact to discuss their options, some years before they even plan to put them into effect 
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