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Want to sell but v few properties to buy - is BTL mortgage as a bridging loan the answer?

1 reply

girasol · 26/04/2021 12:13

Hello,
Perhaps getting a bit ahead of myself but we are looking to sell our place perhaps next year (hopefully once pandemic market wrinkles are ironed out) and buy somewhere bigger in the same neighbourhood - commuter belt South East. The issue is we've decided we want to stay very local to where we are and there are probably only a few hundred houses that we would seriously consider (and could afford) and very few come onto the market. If we want to be in with a chance of pouncing when one does come up, we'd have to have our place under offer if not be an actual cash buyer, but I don't see how we can do this when we could have to wait many months for the right place to come along.
Selling and then renting doesn't seem much more viable as the rental market is little better - there are hardly any family homes that come on the market (even if we were to consider a much bigger area), they tend to go instantly and I fear that we could get stuck renting somewhere unsuitable for many months.
So am wondering if one option is to line up a BTL mortgage in principle on where we live now - effectively as a bridging loan, and get a new residential mortgage in principle lined up too. Then when somewhere does come up we are hopefully in a strong position to buy. We'd face a good few months of painful double mortgage payments but we have decent savings and could hopefully sell our place reasonably easily.
I'm just wondering if anyone has any experience of doing this or dealing with a similar situation themselves and any other suggestions please? Thank you!

OP posts:
Sarjest · 26/04/2021 21:52

Our house wasn’t on the market when one came up that we really liked. The seller wouldn’t entertain our offer until we said we’d rent ours out. We then applied for a btl mortgage and a domestic one, increasing borrowing on the former so that we could afford the new property. We did intend to rent it out short term so that we could reclaim the extra stamp duty but didn’t find any suitable tenants - we were probably quite picky. Decided to sell instead, taking the hit on the early redemption. So doable and we got the house we wanted (and we’d been looking for years).

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