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Original poster

Our position - which is more attractive?

30 replies

Whatshisface · 07/07/2022 07:13

Fallen in love with a house that's on for £800k.

We have £330k cash in the bank, and I sold an inherited property in May for £300k. Due to complete this month.

So total of £630k genuine cash in bank.

Obviously we're short cash wise, and with stamp duty/solicitors etc I need £250k extra in total.

Option 1) get a mortgage (might be tricky as DH and I only work part time, my contract is 10 hours, ((but I work 15-20)) and DH's contract is 30 hours. £25k total income. And we own a rental house so total income is £35k.

Option 2) sell the house we are currently living in which is owned outright. It's worth £300k, we fully renovated it and it's in a very popular area. Houses here get snapped up within a few days.

Which would be more appealing to you as a seller? Would you prefer an offer from someone cash + mortgage, or cash + selling house (but no mortgage needed)?

I'm tying myself in knots! We have to put our position when submitting the offer and I don't want to shoot myself I the foot!

OP posts:
popcorndiva · 07/07/2022 07:18

Isn't the question more like if you can raise a mortgage for 250k? I doubt it on a 35k combined income which includes rental money.

I think yiu would need to sell the property you live in.

Move22 · 07/07/2022 07:20

You would need to sell first then buy.

sorryiasked · 07/07/2022 07:21
  1. Can you get a mortgage
  2. How much is the rental worth and why not sell that so you need a smaller mortgage
  3. Why would you not sell your current home
TellerTuesday · 07/07/2022 07:27

So were you planning to keep your current home?

Petronus · 07/07/2022 07:32

I might be reading this wrong, but if you need to sell to buy, then you are not a proceedable buyer, if you can get a mortgage then with the cash you are in the position to offer, so this is the better option.

Libertybear80 · 07/07/2022 07:34

In this market you need to have sold your house already really. Personally I would sell the house because your earnings won't cover a £250k mortgage.

ItsSnowJokes · 07/07/2022 07:35

Highly unlikely you would get a 250k mortgage on an income of 35k. So the only option you have is to sell your rental but as its not even on the market yet you are not a proceedable buyer.

NewIdeasToday · 07/07/2022 07:35

How would you get a £250k mortgage on £35k income? That doesn’t seem feasible meaning you’ll have to sell your house.

LizzieMacQueen · 07/07/2022 07:35

You need to keep money back to pay any capital gains tax on that inherited property. Have you had advice about that?

pilates · 07/07/2022 07:37

As pp have said you won’t get a mortgage on your joint salary and so you don’t have a choice but to sell your existing property. You won’t pay so much stamp duty either if you sell your existing property.

Perfect28 · 07/07/2022 07:38

As others have said its very unlikely that you'll get the mortgage based on that income, have you actually checked/got an agreement in principle? Otherwise this question is null and void really.

TheTeenageYears · 07/07/2022 07:46

The house currently being sold isn't cash in the bank until the sale has actually completed so your current position is cash + progressing sale + not yet applied for mortgage or not yet on the market property. I don't think you are in the advantageous position you think you are to a vendor.

Whinge · 07/07/2022 07:49

TheTeenageYears · 07/07/2022 07:46

The house currently being sold isn't cash in the bank until the sale has actually completed so your current position is cash + progressing sale + not yet applied for mortgage or not yet on the market property. I don't think you are in the advantageous position you think you are to a vendor.

This sums it up. Sorry OP, but unless the 800k house is unattractive to any other buyers then I don't think you'll be proceedable in time to buy it.

StuckInARug · 07/07/2022 07:50

There is absolutely no way you can get a £250k mortgage on an income of £35k.

Getoffmyshoes · 07/07/2022 07:56

Which would be more appealing to you as a seller? Would you prefer an offer from someone cash + mortgage, or cash + selling house (but no mortgage needed)?

Neither, I wouldn’t accept an offer from someone who hadn’t sold their house, nor someone who didn’t have a mortgage offer (at least an AIP) which I don’t think you have as your income wouldn’t cover 250k.

plugee · 07/07/2022 17:01

Have you factored in capital gains on the inherited property?

Did you used to earn more as you have a lot of assets for a small income? could you go back to that work if so?

plugee · 07/07/2022 17:03

I think chain free with aip or cash buyers are preferred

minipie · 07/07/2022 17:08

You’ll save a lot on stamp duty and eventual CGT if you dispose of your existing property first.

I agree either of your options may be too slow for a vendor however.

Housebuyingfamily · 08/07/2022 10:56

35k household income but 630k in the banks

mental

plugee · 08/07/2022 11:27

and it's why I favour more wealth taxes!

SafelySoftly · 08/07/2022 21:51

Yes good point Plugee! And let’s hope OP has factored CGT.

Heronwatcher · 08/07/2022 22:56

OP have you looked at how many times your salary you can normally borrow? If you earn £35k then you’d need to find a lender who was prepared to give you a mortgage for over 7 times your salary. I personally have never heard of this (last time I took out a mortgage it was about 4 times, max). So I think you need to speak to a mortgage adviser ASAP, and/ or get the property you own on the market ASAP.

anon2022anon · 09/07/2022 06:35

Could you look at a bridging loan while you sell your property?

TheMagicDeckchair · 09/07/2022 13:14

How much equity is in your rental? Would selling that cover the shortfall?

Even if so, the additional stamp you’d be liable for on the £800k if you don’t sell your main residence is a big sum to take into account.

Looking at your figures, you should easily be able to afford £800k and costs and stamp without a mortgage if you liquidated one or both of your properties. In your position of high wealth but low income doesn’t this make the most sense? Especially in an environment of rising interest rates/higher costs for landlords?

Floraanddougal · 09/07/2022 13:16

It’s a moot point, you can’t get a mortgage for that level

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