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Answered on 7 September 2016 by Nick Morrey
How can I buy a new property when I haven't sold mine?
There are a couple of different options for you depending on how much the new property is worth in relation to your current one and on your own suitability for a mortgage.
If your current property is worth more than the new one you may be able to raise a mortgage on it for the full cost of the new one. If you are eligible for a normal residential mortgage then you just need to make sure that the product you choose does not have any early redemption penalties, so you can sell your home and repay the mortgage without having to pay £1,000s for the honour. If you do not qualify for a standard residential mortgage then you may still be able to arrange a bridging loan. These can be secured either against your existing home or both properties and again would be repaid upon sale. They tend to be more expensive than a normal mortgage because of their short term nature.
If the new property is more expensive then you will probably have to arrange a bridging loan on your current home to cover the deposit and a normal mortgage on the new property. Again you will need to make sure that the new mortgage gives you the flexibility to reduce the amount outstanding once you have sold your current home without being penalised.
I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers. Please call 0344 346 3672 and one of our advisers will then be able to help you find the right solution for your situation.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.