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Buying a house that we really like and worried if the chain below us breaks we might lose it.
Just gone on mortgage calculator and realised I can borrow a lot more than I thought and if I cash in all savings, sell car I could just about cover the purchase without selling my house.
So plan would be....
Get massive mortgage with no early redemption charge.
A. Hopefully chain doesn't break, sell/buy transaction goes through in conventional manner. Then pay back half the mortgage that wasn't needed.
or
B. If my sale falls through, go through with purchase anyway using big mortgage, then hopefully sell my house within a few months and pay back large chunk of mortgage with proceeds.
Anyone done something like this before? Any pitfalls? Are the mortgage companies ok with this?
I assume you'd have a load of charges to pay wether you needed the 2nd mortgage or not.
When I last moved we took out a mortgage on the "new house" in order to buy it before we'd sold the old one. This used to be "bridging" though that seemed hard to come by these days. A mortgage advisor hooked us up with a deal that wasn't (apparently) available to the general public. It all went swimmingly. There was no early repayment fee either.
I ain't no expert but surely it all comes down to how long you could realistically keep paying the massive mortgage if the sale takes longer than you hope?
Yeah they'll give you the money but can you stand eating out of bins and drinking from puddles.
I assume you'd have a load of charges to pay wether you needed the 2nd mortgage or not.
Shouldn't be any charges with a no early redemption mortgage if I pay a load off. Well that is what I was hoping anyway!
Survivor +1
Be careful, as you'll probably fall foul of the second home additional 3% stamp duty.
Not looking at bridging loans which have pretty high interest rates - just standard "no ERC" mortgages. Just wondered if there are any issues with doing this. I'd imagine the mortgage companies wouldn't be keen especially if they are banking on getting 25 years interest payments and only get a few weeks.
Oldschool - if you sell your original house within 18 months and it's clearly a case of th delayed replacement of the a primary residence you get the higher SDLT costs refunded
3% stamp duty is a pain, but you can claim it back when you sell your original house.
Been to see an IFA yet?
Can understand why you wanna hear some feedback from the masses here, but start with a financial advisor.
Stoner - Member
Oldschool - if you sell your original house within 18 months and it's clearly a case of th delayed replacement of the a primary residence you get the higher SDLT costs refunded
Ta, wasn't sure but good to know.