robby

Parents have a house worth £xxxxxx which is fully paid off, they've been looking at moving and have found an ideal 1 this morning which is up for sale £40k less than their current house was valued at 2 weeks ago.
Now being 60 they're not sure if they can get a mortgage to buy the new house while theirs is up for sale but don't want to miss this other house in case theirs takes a while to sell.

What alternatives are there (if any)? would a bank/ bs give a 90 - 100% mortgage to a 60 year old couple who can use their current house as colateral? do they go for an intrest only mortgage? what sort of fees would they expect to pay?

Cheers

Gordo

Bridging loan.

But bid much lower on the other such that the gap is more than £40k - your parents won't get as much as they think for theirs.

G

fast bloke

Depends how much their house is worth, but they should be able to raise the money on their own house. Avoid bridging loans - high rates and high fees. They should look for a deal with no tie ins and no fees.

MickeyTake

Mortgage their current house and buy the next as a cash buyer would be the best/cheapest route assuming that the loan is a small LTV.

It is, actually, madness to do this in a falling market to be brutally honest ..... the risks are huge!

A house worth £250,000 today will be worth £245,000 in 30 days time at the current rate of loss (which is increasing) ......... it will take just about 6 months of not selling their current home for that £40,000 difference to be wiped out! It could be as short as 3 months if what I have witnessed in the market is common elsewhere.

Chase a rising market - but NEVER a falling one! Just my two penneth.

tarmac terror

iTrader: (2)

Echo the comment above. Its a bit high risk at the minute. I'm not an expert in this field at all, but my Brother in Law has had his house on the market for about 2 years now, still little or no interest. Its a great 4 bed detatched house in excellent condition in a nice area of Cheshire.

I have just bought a property which 3 months ago was on the market at £340K I took it for £280 and think I could possibly have squeezed a bit more out of the deal had time been on my side, I am expecting its value to continue to fall below what I have paid for it.

i would advise caution in the circumstances.

scoobyvirgin

You lucky sod, I knew house prices were falling, but to come to less than a weeks wages is crazy!

robby

well they're putting the house on the market tommorow and have an appointment with an advisor next week.
Anyone know about interest only payments on a bridging loan (is this available)?
they really want this other house and there have been 3 other couples looking at it so they don't want to miss out while waiting for their house to sell

MickeyTake

I would REALLY urge caution!!!!

There are always people looking at houses .... not too many are ready, willing and able to proceed ..... I hope this house they want is really, really special - as in the current market, nothing is selling for anything near the asking prices!

David Lock

I've had 2 bridging loans albeit in the old days when banks seemed to work.

I paid 3% over base rate and it's an excellent way of losing weight as it's a bit of a worry. Fortunately it all worked out.

I don't think you have said if your dad is working as, whilst the house might be fine for collateral, someone will want to know if he has an income to support interest payments, even over a short term. dl

robby

yep - old man works full time and old woman works part time(almost a full time wage though)

they do have savings but not enough to buy the other house outright

Harryr34

iTrader: (9)

I can highly recommend David at Clear Cut Mortgages for any advice on mortgages!

Suresh

In the current environment I'd strongly advise to sell the current house before buying a second. Less risk to their retirement fund that way, even if it means missing out on the one that's currently up for sale.