Short Term Funding

Posted on 29 October 2010 by Olivia

Hello. My house has been valued at £145k but on the market at £135k for a quick sale. I owe only £7 on this property mortgage. I wish to purchase a house for £185k but only have £7k in savings. Income after taxes is £33k pa. Is there any way I can purchase the new property before selling the current one? Thank you.


It is unfortunate that you do not have a larger deposit saved, but depending on your personal finances it should be possible to raise enough funds against both your existing property and the new one to fund the purchase.

The easiest way to do this would be by arranging a further advance with your existing Lender for the deposit and then a mortgage on the new property for the difference. You will find that the more you are able to put down as a deposit the better the mortgage products available to you to choose from will be.

If your existing Lender is reluctant to give you more money when you won't be living in the property then it should be possible to arrange bridging finance. This can be done through either your own bank or one of the many specialist Lenders who operate in this area. The interest rate and fees you pay will typically be higher than a normal mortgage, but you would normally only pay an additional 30 days interest to redeem the loan early.

I recommend that you speak to both an independent Mortgage Broker and your Solicitor before committing to any purchase.


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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