I need to own 2 houses for approx 18 months....how?

[mooseracer]

Our main home we own outright with no mortgage, and we are wanting to buy another house for around 300k. The intention is to have both for around 12 months and then the original house will be sold (around 350k).

What is the most effective way of doing this which minimises the outgoings for that 12-18 month period?

We will be using both houses so buy to let isn't an option. Do we suck it up and get a mortgage on the newer house, if so do we pay the deposit out of savings or is it better - or even possible - to somehow raise funds from the house we own outright?

[leef44]

I was in this same situation except I sold my first house within four months. The principle is still the same. We were moving from Surrey to North Yorkshire, downsizing and retiring in a year's time. Buy house in Yorkshire then sell house in Surrey.

I went to a mortgage broker from this forum, if you know who they are. They got me a mortgage on my current home (interest only) to use as funds for the purchase of my move into the second home. I couldn't borrow enough so had to use some funds from my savings. Unfortunately I had to take some out of an ISA and lost that allowance.

The advantage of doing it this way was that I got the funds not just approved but ready to transfer to my bank. So the legal team of the building society who were lending the money were waiting for my call to transfer the funds. In fact they nearly jumped the gun to put the money straight into my account.

So this then puts me in a "cash buyer" scenario before I started looking for my second home. I found a property with no chain, seller was moving out into their son's house until their new build was complete. So this really simplified the process.

When I sold my house we were also no chain and the move was easier since I could take my time moving stuff to the new house. We moved out a day before contract completion which made is so much easier for the buyers.

The downside of course is the interest on mortgage during that gap. A mortgage broker should be able to minimise that. The second point is the second home stamp duty (extra 3%) to pay and then claim back once the sale of the first house is completed.

FYI: the mortgage broker I used was Sarnie on here but Caddyshack also offers the same service. Sorry to other brokers for not giving a mention because I don't know their names.