Should I sell before I buy?
ESPC Mortgages' David Lauder gives us some topical advice on the need to sell before buying in the current market.
At times when some people are finding it harder to sell their properties, there are alternative options to make the step up the property ladder. A deposit is the key element. At a minimum of 10% to 15% deposit requirements, but if you have savings, this could be an option to buy your new dream house now.
Rent out your home - Consent-to-Let
Applying for a Consent-to-Let on your existing mortgage may be an option. This, in essence, means that the anticipated rental income from the current property allows it to be deemed as a self-funding property which will not be treated as a commitment; this will free up your income to increase your borrowing for your new property. Another bonus is that often the terms of the existing mortgage will remain the same or similar so you are getting residential mortgage terms on a buy-to-let property.
Free up your deposit
If you need to create the deposit for the new property then the other option is to re-mortgage your current property to a Buy-to-Let mortgage whilst also releasing equity from this property to then be used for a deposit on the new property. This is subject to borrowing a maximum of 75% of the value of the current property and also anticipated rental income being sufficient.
Both options above let you buy without selling and as the market continues to recover, the property you were looking to sell may grow in value which means a better return when you do decide to sell.
Come and talk to me and see how I can help!
David Lauder is Mortgage and Financial Planning Consultant who helps clients find the most suitable mortgage solution tailored to their circumstances along with identifying any other gaps they may have in their finances.
Call him on 07810 522 422.
Read some of David's other articles
- How much deposit do I need?
- Predictions for 2014
- What is an offset mortgage?
- Affordability, how much can I borrow?
The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.