Buying a new home without selling existing home

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A client came to us after they had found a property they wanted to buy…

Unfortunately, they had not been able to sell their current home. After reviewing the affordability, it wasn`t possible to keep both houses on a residential basis. This limited the options available, but we gave them a few choices. One option was to look at getting a bridging loan until the house sold. But this is normally an expensive option without any time scale of when the home is going to sell. Another option was to look at two mortgages, a let to buy on the current home raising some money to use a deposit for the new property. This meant getting two mortgages and using two lenders but by arranging the let to buy they could make a small income until the housing market picked up. *

Let To Buy:

Property value £130,000
Loan amount £95,000
Loan to Value 73%
Rate 3.2% No tie in period
Monthly mortgage payment£252 on an interest only basis
Arrangement feeNil
Valuation fee £300
Rental income £550 a month. Making an income of £298 a month *

* You should seek advice from an accountant before you look to make an income from a property. You will have tax liabilities on this.

Purchase:

Property value £165000
Loan amount £115000
Loan to Value 69%
Rate 1.99% Fixed for 2 years, over a 25 year term
Monthly mortgage payment£486
Arrangement feeNil
Valuation fee £300

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