How can I buy a new property when I haven't sold mine? Part 2

Posted on 8 September 2012 by Amanda


I have a rather frustrating problem. Our house is up for sale although we have only just put it up because we have seen a property in scotland. We need to find a way to come up with £160,000 until we have sold our house to buy the second property. Our property is worth £230,000 and we owe £135,000 on it. Is there any way we can achieve buying this second property whilst selling our current home?

Amanda

Please see my reply entitled " How can I buy a new property when I haven't sold mine?"

In your circumstances I think that it will be necessary to raise the deposit for your new purchase on your current home and then take out a mortgage on the new property for the balance.

As you will have two mortgages outstanding most lenders will want to restrict the new one to 75% of the property value (LTV) and this means you will need a deposit of at least £40,000.  The easiest and most likely the cheapest way to raise this would be by asking your existing lender for a further advance, taking your current mortgage up to £175,000.  You may need to borrow slightly more to cover stamp duty and other moving costs.  It is possible that your lender will not want to lend you any more money if they know you are intending to move out of your current home and you would then have to consider a bridging loan.  In this case, I think that you would find yourself restricted to borrowing 75% of your current property value, i.e. £37,500 which may leave you with a slight shortfall to make up by other means.

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 tell the consultant the date and title of your question, they will then be able to help you find the right mortgage for your situation.

Peter

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.

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