Can we buy before selling, or do we need to wait?

[Weaningworries]

We’ve seen a house that we’d like to buy but unfortunately we’re not in a proceedable position.

House we want to buy is £750k. Our house is worth £650k and we have £250k equity if we sell at this price.

Our Mortgage affordability (on top of any deposit) is approx £900k.

We’re going to talk to a mortgage advisor, but is there anything that could be done here that isn’t just waiting for ours to sell before making an offer? Seller isn’t willing to wait for ours to sell.

Would a bridging loan work here? We have no additional savings that could be used. How would this work?

I know when I bought, I was allowed to have 2 residential mortgages, so was able to buy the new house before the other sold because I was able to meet the affordability of the 2nd mortgage. Was paying 2 mortgages for the duration til the other one sold, i also had to purchase the new as a 2nd property (paying additional, but was able to claim back as primary residence when old sold within 3 months). This was 10yrs ago so it may have changed.

You can offer, but without an agreed sale you may not be seen as credible.

That was how it worked when we bought our place. It seems to be at agents/sellers discretion.

Did you have to stump up a deposit for the second property though? We do have the affordability but we don’t have a deposit to put down for the second (nor the money to pay for the stamp duty outright).

Yes, they won’t accept the non-proceedable offer as they need to move ASAP themselves.

In the same situation we let out our original house. Our buy to let mortgage released the equity needed. Is that an option?

We remortgaged our house to get a deposit as we had a lot of equity in it. We then got a new mortgage on the new place.

We will be putting our property onto the market next week - so just looking for a super short term solution really! We are confident our house will sell in the next few weeks (we’re willing to take a hit on it to get it sold fast). But we just need to get the ball rolling with the property we want to buy ASAP.

We’re even hoping that we could sell ours quickly and then can just transfer our current mortgage across during the buying process.

@Weaningworries mortgages don’t work that way. A mortgage is based on a particular property/valuation etc. So a new property requires a new mortgage based on that property

If they are keen and have other offers they probably won't wait for you. We were able to get an offer accepted subject to sale for our current house - they gave us 4 weeks to sell and we managed it. We took less than we probably would have gotten had we had less of a rush, but exactly what we needed to make the sale work so no regrets. But the house we bought had been empty for a year so they were willing to wait an extra month.

Yes - as mentioned, they are not willing to wait. Hence why I am looking for ways to move forward prior to the sale of my own house. We are prepared to accept a low offer on ours and so don’t anticipate a long time on the market, but I’d like to get our offer accepted and start proceedings rather than waiting a couple of weeks for our own property to be listed and sold.

Yes I did

It looks like you have to suck it up and wait until yours is on the market an under offer, sorry.

We tried to move a couple of years ago and gave up. We couldn't even book viewings without having an offer accepted on ours, but we were only prepared to move for the right house which we couldn't assess without a viewing. We gave up in the end.

Not necessarily- a lot of mortgages are portable. I’ve ported twice. You can add additional borrowing as a separate product or if you need less you can reduce the ported product.

@Weaningworries it doesn’t sound as though you have the affordability to run your current mortgage alongside the additional borrowing required as you don’t have the equity in current home until it’s sold so you will just have to hope you can sell in time.

If you have that type of affordability then (and no judgment here!) you are not on the breadline - there must be a reasonable income etc. as you are looking at £5k+ per month (25 year / 4.5%) for £900k mortgage

This might put you in a good position to talk to one of the specialist baks such as Handlebanken who can often be very much more creative with how they do borrowing / mortgages / etc. - as they look at your situation more individually rather than through a computer algorithm - they often deal with the wealthy and can be as creative as using painting / cars / other assets as a part of the mix - they don't just work on the basis of simple maths...

otherwise, you might need to find a route to get the deposit elsewhere, or the mortgage at 100% and a loan / credit cards for the stamp duty etc. but worth taking advice so that you don't screw up your credit rating!

That isn’t true. Some mortgages are portable. Ours was.

You’ll have to pay extra stamp duty on a second property. This is what stopped me from proceeding with a property I wanted before I sold. It’s a lot of money on top of basic stamp duty, although you can claim it back if you sell within 36 months.

You want 1400k of house.

Have funds of 900k mortgage - which isn't enough as you have 400k mortgage outstanding on current house, and need to borrow a further 750.

I would think it’s unlikely you’d get a second mortgage even with your affordability, which is basically what you’re asking. A mortgage offer tends to be based on equity being available and the assumption of a sale, meaning you are freed from your previous mortgage. You don’t have cash for a deposit and you probably wouldn’t be approved for a mortgage on top of your existing one to cover the value of the property.

The market is not that hot though, so I expect they may not be under offer as quickly as they think they will. But similarly, you likely won’t be either.

We did have the deposit to buy our new property without selling the old one but had a ginormous mortgage and had to pay the additional stamp duty for a second home.

We assumed our house would sell very quickly, as did everyone else, estate agents, mortgage company, friends, relatives, neighbors......

It took 18 months to sell during which time we were paying a huge mortgage on a property that was empty, it was harder to sell empty than full as every imperfection shows.

We don't regret it as the house we bought was unique and we would have lost out on it. Plus we had quite a finanacial buffer. But it was incredibly stressful and expensive.

Houses that you might think were desirable an easy to sell are stagnating.

Bridging loan sounds like your only option.

It doesn't really matter what you'd "like" though...you can't make them agree to sell it to you, and it's understandable that if choosing between someone who doesn't have a property to sell, or even someone who has a sale agreed, vs someone who hasn't even put their house on the market yet of course they aren't going to choose you!

You also won't sell your house with a few weeks either. At most, if you're lucky, you'll receive an offer and have a sale agreed - this doesn't really mean anything, your buyer could drop out at any point until exchange of contracts - even if you do get an offer next week the seller might not choose to sell to you.

I know the process is completely annoying but that's the way it is - I've offered well over asking price on the last 2 properties I went to see, but they were both turned down in favour of first buyers without chains.

And yes, in answer to the q you asked up thread, you will need a deposit for the second house (minimum 90% with all the lenders I looked at, although most want more) AND a way to pay the stamp duty fees (which will be far higher than normal for a second property, although as the pp said you can claim the difference back when you then sell your current house).

We did this…put a deposit on the new house, got the mortgage, moved in and then sold the other house.