Short Term Finance Options

Yes, purchasing a new property while still owning your current one can be a bit more complicated, but it's definitely possible. 

Here are some steps and considerations you'll need to keep in mind: 

1. Financing - since you own your current property outright, you might consider using it as security for a mortgage or a bridge to finance the purchase of the new property. This could involve taking out a loan against the equity in your current home to use as a down payment for the new property. Alternatively, you could explore bridge loans, which are short-term loans designed to bridge the gap between the purchase of a new property and the sale of your current one  
2. Timing - buying a new property before selling your current one means you'll need to carefully manage the timing of the transactions. You'll want to ensure that you can afford to carry both properties until you sell the current one. Additionally, consider how quickly you can sell your current property and factor that into your timeline for purchasing the new one  
3. Contingencies - when making an offer on the new property, consider including a contingency clause that makes the purchase contingent upon the sale of your current property. This can provide you with some protection in case your current property takes longer to sell than anticipated  
4. Financial stability - be sure to assess your financial situation carefully to ensure that you can comfortably afford the additional mortgage or loan payments associated with the new property. Consider factors such as property taxes, insurance, maintenance costs, and any potential rental income if you plan to rent out either property  
5. Legal and tax implications - buying and selling property involves legal and tax considerations. Consult with a solicitor to understand the implications of your transactions  
6. Professionals - working with experienced real estate agents, and mortgage brokers like John Charcol can help you navigate the complexities of buying and selling property simultaneously. They can provide valuable guidance and expertise throughout the process  

As you own your property outright it should be possible to raise up to 75% of its value as a short-term loan. This would give you the money towards your new purchase. For a bridging loan you can expect to pay between 0.55-0.95 per month as well as a 2% arrangement fee. 

These costs would be added to the loan and repaid on the sale of your house.  Whilst this may seem expensive it could mean the difference between successfully purchasing the house you want and losing it whilst you wait for yours to sell. 

However, this may not give you sufficient funds to cover stamp duty and other associated costs of purchase and it might be that you would be better arranging a mortgage on the new property. If you choose a mortgage with no early redemption penalties, then you would be able to redeem it once your own house is sold.  It is likely that this would be a cheaper alternative. 

Overall, while buying a new property before selling your current one adds complexity, with careful planning and professional guidance, you can successfully manage the process and achieve your goals. 

Please call 0330 433 2927 and one of our consultants will then be able to advise you on your situation.