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What to do???

(4 Posts)
eyestightshut Fri 23-Sep-11 14:48:42

I need some advice please!
I'm going to have a 2nd viewing on a house that I have been hankering after for a while, but as we were unable to proceed (our buyer pulled out) hadn't made an offer.However we have accepted a new offer on our place yesterday (yay!) Our plan is to buy house and do an extension and other work that we estimate will be about 40K.
The estate agent for house we are going to view has told us that an offer has been made yesterday, but turned down (offer was 92% of asking price) we would intend to offer 95% of asking price.
I need to make a decision about the following 2 options:
1. We buy house outright (Savings plus proceeds from current property) but would then need to mortgage the property to do extension.
2. We have mortgage agreement for 40K,proceeds from sale,plus deposit from savings. Would then have rest of savings to spend on work that needs doing.
Which option would induce you to accept our offer over an increased offer from the other person IYSWIM?

lalalonglegs Fri 23-Sep-11 15:03:00

Go in mortgage free because the chances are your extension plans will take time to get under way so you might as well live without mortgage while you sort out a builder, drawings etc. Also, it might be more (or possibly less) than £40,000 when it is priced up properly so you can borrow exactly what you need when you have a better idea of costs. It's going to be more attractive to the vendor if you can stress that you don't need a mortgage to in order to buy.

minipie Fri 23-Sep-11 15:44:39

Option 1 because a buyer getting a mortgage approved can take aaaages (even if you already have agreement in principle). Plus there is always the fear (if you are the seller) that the mortgage company may say no for some reason, or value the property at lower than the agreed price, and then the buyer will pull out or reduce their offer.

So if I was the seller, I'd prefer option 1 definitely as it will be quicker and more certain.

However: if you are going to go with option 1, you should do 2 things to protect yourself. (1) check that a mortgage company will actually lend you the £40k after purchase. it's just possible they might not for some reason (eg there are certain types of property that mortgage cos won't lend on). (2) get a survey. You won't need one if you are having no mortgage but you should get one for yourself anyway. It would make sense to try to ensure that the mortgage co you are intending to use will accept that survey, otherwise you could end up paying for an additional valuation when you take out the mortgage.

eyestightshut Fri 23-Sep-11 16:30:03

Thanks for the advice, giong to see it in a bit!

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