We have £5K left to pay off on our mortgage. We also have plenty to finish off DIYwise ( nothing very costly) following some big renovations we have recently done. Therefore its not an ideal time to sell. Add to this the fact that the market is SLOW where we live, and houses take months if not years to sell.
But we've happened upon our perfect home! It's got no chain, owners are desperate to move and we could get a real bargain, and a gorgeous home. Our salary is more than enough to cover the £275k mortgage.
So we'll just get a new mortgage for second property, we thought. Do some minor renovations to new property before moving in (staying in existing house). Move in and finish off renovations on first house, and then put on market and eventually use proceeds of first sale (c £150k) to pay off good bit of new mortgage. We have approx £20k savings which could be put towards deposit, but preference would be to use equity from first property if at all possible.
However, on ringing mortgage companies it all seems verrry costly and verrrry complicated. Deposit will apparently need to be 15-25% as it is for a second home (this is way beyond what we were expecting or what we can afford - £45k+), there is no way to use equity and if anything we are being penalised for having 150k tied up in property ( which we had thought would be seen as a good thing!).
We have obviously been very naive about the financial position. Does any one have any advice or options? We can get current house on market asap, but I would eat my hat if it sells in time (if at all given the state of one or two rooms coupled with the local market) to give us a chance of getting the property we love.
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Second home using equity from first???
6 replies
LocatingLocatingLocating · 26/06/2015 20:25
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