Buying a house while my other sells

[3sixty]

We're about to put our house on the market this week and she has already found the one she loves (House wise). Our current house was our first, so not had any experience in selling.

We have a mortgage in principle for the new house, with deposit and have enough incoming to be able to afford both mortgages for around 6-9 months if the current house doesnt sell.

I realise we should wait for ours to sell, to avoid paying for something we're not using... but she is smitten and NEEDS the new house apparently There have been offers on the potential new house, nothing accepted yet, all way below according to the agent... hence the suggestion of owning 2 houses at same time.

Looking to PH to advise. Is this a good suggestion? How do we go about informing current house mortgage provider, if we need to at all? Will house insurance be difficult to get if its left empty?

[touching cloth]

I would guess your new mortgage has probably been agreed in principal based on you clearing old one at same time upon sale of original house - not based on having both at the same time. Your income multiples would need to work on the total of both mortgages if you plan to temporarily keep the original house, which will fundamentally change your application - if the multiples still work then all good and it's possible - only you can really judge how risky a proposition it is.

[3sixty]

Thats the kind of information I'm after. Yes, the principle will be based on us selling our current one.


I dont think our income multiple would cover the value of both mortgages, both mortgage together would be roughtly 4 times our joint income... so sounds like its out the question then.

Thanks.

[touching cloth]

The other option may be to rent current house out (longer term, not just 8-9 months). Switch current mortgage to a Let to Buy and new one remains normal residential. You still need to convince new lender that the original mortgage is now sufficiently covered with rent so that they effectively remove it from their own calculations, they may want to see a tenancy agreement already in place before lending etc. All doable if you really want it, but suddenly you are a landlord with all that that entails - of course play the market right and you have geared yourself up for property price increases on not one but two properties which is great.... however you are of course more exposed should there be more falls in property values. You'd also need to gen up on tax on rent and CGT on sale profits on the second home if you do this.

[3sixty]

Thats another of her suggestions. I'm worried about not being able to rent, plus the faffing involved with trying to get a BTL mortgage (If you still can??) and like you say, all that entails being a landlord etc.

Basically using this as means of trying to make her come round to my way of thinking, in that selling ours first represents the most sensible thing to do.

Unfortunately, this means possibly at the expense of her 'DREAM' house...

[rovermorris999]

If you are prepared to accept a lower price for your house consider auctioning it. But unless the 'dream' house is a real one-off I'd sell in the normal way and be prepared to go into rented for a short until the another house comes along. You'd be in an excellent position then too.

[3sixty]

Thanks Rover, exactly what I'm trying to say. Sell this, rent if necessary, and then buy.... just need to make her accept my way of thinking!

[Dr_Gonzo]

3sixty said:

Thats another of her suggestions. I'm worried about not being able to rent, plus the faffing involved with trying to get a BTL mortgage (If you still can??) and like you say, all that entails being a landlord etc.

Basically using this as means of trying to make her come round to my way of thinking, in that selling ours first represents the most sensible thing to do.

Unfortunately, this means possibly at the expense of her 'DREAM' house...

Talk to your current lender. You should be able to get permission to rent it out. And if you can find a decent agent it should be pretty painless being a landlord. One thing to bare in mind though is that it's generally better to either have a house 'For Sale' or to have it let. It can be very difficult to sell a house with a sitting tennant.

[Bill]

3sixty said:

I dont think our income multiple would cover the value of both mortgages, both mortgage together would be roughtly 4 times our joint income... so sounds like its out the question then.

We got a bridging loan for a month or so to get into our current house and despite the fact we could cover the loan it was very stressful. The market stalled a few months later which would have been very expensive

[JQ]

There is another thing to consider with letting your current house out - if house prices start to fall again next year (reduced gov spending, tax rises, interest rates, etc etc) you will lose double the amount, being exposed on 2 properties. I don't know what will happen to house prices, but we currently live in very strange times.

Bridging loans - very expensive and what happens if it takes 2 years to sell your house.

[behappier]

3sixty said:

Thats the kind of information I'm after. Yes, the principle will be based on us selling our current one.


I dont think our income multiple would cover the value of both mortgages, both mortgage together would be roughtly 4 times our joint income... so sounds like its out the question then.

Thanks.

Worth asking your bank, that does not seem too much of a stretch.