To ask for mortgage advice?

[MortgageInterest]

Recently divorced, settlement includes a quite substantial lump sum towards purchase of new home. Former marital home to sell (and from which I get further equity).

AIBU to enquire as to whether I can find a mortgage with the cash sum to purchase a property, and pay off the balance (ie the entire mortgage) as soon as the former family home sells? I know how expensive a bridging loan can be, and I'm not sure I can risk it.

I've found the perfect house. I really would like to get it, and make a new home for me and my DC. Problem is we haven't got our property onto the market yet (doing it in New Year).

How can I make this work? Or do I have to let it go?

Of course you can do that. I wouldn't tell the lender of those plans though as technically a mortgage is long term and they may say it's not a suitable option for you.
You also need to bear in mind that if you chose a fixed rate, there will be a penalty to repay the loan early. So you'd need a tracker or variable rate.

You need to have the affordability to pay the mortgage repayments
As in you need to have the income multipliers to afford the mortgage regardless of your intention to then pay it off at a later date
If not you’ll have to wait till you have all the cash available

Plus if your name is on the current mortgage you may struggle in terms of affordability. If I were you, I'd either buy a cash purchase house now then invest the equity once your family house is sold with a view to buying again in a few years.

You’ll just have to make sure you get one with no early redemption fees - they can be in the tens of thousands.

Speak to an advisor and check ERCs.

There are two year fixes as low as 1.2% - may be more sensible to get that and then clear the balance at the end of the period?

Thanks everyone - I will speak to an advisor in the morning and see what the options are. Whilst I'm named on current mortgage I've never paid it. Victim of financial abuse so it never came out of any accounts with my name on it, even. Not that it makes a difference as I'm still joint owner. Thank you though - I feel like this COULD happen...

You can definately do that but check the mortgage you pick allows you to pay it off in full - many have a maximum 'overpayment' allowed per year for example but a mortgage advisor should be able to help with this

If you're named on the existing mortgage, legally you're liable to pay it so unless you have the income to support both mortgages, you might not be able to take out a new one until, or at least at the same time as, settling the existing one, ie in a chain where the purchase of your new property is dependent on the sale of the old one.

We did something similar.

Had a sizeable deposit and the majority of the mortgage would be paid off when we sold our home.

We thought of a bridging loan but the fees were extortionate and it proved difficult anyway.

We got a broker to find us a mortgage where there was NO penalty paying off a lump sum.

The deal in the end turned out great. Short term pain while waiting for the house to sell, but it was worth it.

The key is not to reveal you'll be paying it off. No mortgage company will be interested.

The mortgage was with Santander.

Hope that helps.