What to do for that dream home?

[r4478]

Hello,
My family and I live in a house (Prop01) worth appx £350,000 (at least that was before Christmas), we have also unfortunatly been left a property (Prop02) worth appx £330,000 (again, before Christmas). We have seen our forever home for appx £340,000, (Prop3). This home is in Scotland, the others are in England. We have an appx £200,000 mortgage to pay in order to be clear on Prop01. Prop02 is on the market, but there is not much interest. Prop01 will go on the market in a couple of months.

So in order to buy Prop03, what other options do people think we have? The ones we've thought of are below.

=Wait until Prop02 is sold and clear the mortgage on Prop01. Then sell Prop01 and hope the forever home is still availabale.
=Sell Prop02 and make an offer on Prop03, keep paying the mortgage on Prop01 until it is sold.

Many thanks for any comments.

Firstly, are you well informed on the process for buying in Scotland? The rules are different to England, I believe? You'll need to engage a solicitor and request that they formally note your interest with the selling agent. This will keep you informed on any developments in the sale, including the closing date for making offers. They will need to complete anti-money laundering checks before they can submit an offer on your behalf. This is done without a commitment to purchase. It will keep you in the loop and you are more able to proceed when circumstances allow.

With regards to your current properties - Could you put both on the market asap? See which sells first. Use the equity from this to fund your offer on the new property. If it is likely to take some time to purchase, reside in whichever property is unsold until you can move to Scotland.

If property 1 sells first - use the equity as a deposit for a mortgage for the new place. Choose a flexible mortgage without any penalties for redemption. As soon as property 2 sells, redeem the mortgage on the new place.

If property 2 sells first - use £200,000 to redeem the mortgage on property 1, and the remaining £130.000 as a deposit on the Scottish property, taking out a flexible mortgage without redemption penalties. As soon as property 1 sells, redeem your mortgage in Scotland.

This strategy will give you the greatest chance of securing the new place, as either of the current properties being sold would facilitate it. Also, you would only have one mortgage at any one time, with a substantial deposit. Choosing a mortgage without redemption penalties on the Scottish place (likely to be a SVR) would give the greatest flexibility to work around the second sale.

Put both on the market asap.
Me & DP needed to sell 2 properties so we could buy one together and it took forever.

We experienced long delays with both sets of buyers which would have felt much less if they were at the same time rather than one after the other. We also lost out on properties we were interested in because of this. Plus we spent a fortune on doubled up bills/mortgage etc.

I think I’d draw down a new mortgage on prop 1 or prop2 if you can and use that as a deposit for the dream home along with any cash you have. Assuming you couldn’t have three mortgages outstanding just based off your earnings, could you get a second home or buy to let mortgage on the dream home? Maybe a two year fix rate to give you time to sell your other properties. once prop1 and prop2 have sold you would move into the dream home and tell the lender your circumstances have changed and you’re living there now. You’d try to choose a mortgage for it that doesn’t have penalties or just wait til the end of your two year fix and then redeem it in full using sale proceeds.

Make sure you have enough cash to cover the additional dwellings tax in Scotland which needs to be paid with the stamp duty.
If you sell both other properties within a 12 months you can claim this back, but you'll need the 6% capital upfront.