buying house before selling: lender says NO

Aug 12, 2003 3 Replies

Hello all, I have a question regarding buying a house before selling for which I didn't find an answer in the past posts in the group.



My aim is to buy a house and have a period of, let's say, one month before I move in so that I can do some work (redecoration etc) on it. The new house costs around 190000.



If I add what a lender would give me for a mortgage for the new house (around 140000), plus my savings (33000), I don't have enough money to buy the new house directly.



But I have a good equity in my current house (67000), more than enough for what I need.



So I thought of asking my current lender (Egg) to give me an additional sum from the equity of my current house with which (added to the new mortgages and savings) I could buy the new house.



I would have two mortgages to pay, but just for one month. I would have the completion date fixed by the solicitor so that I would know exactly for how long I have the two mortgages and budget exactly the sum needed.



When I phoned Egg asking about this they said that they would not let me do this because they cannot let me have the total sum of the two mortgages (too high compared to my salary) even if this is just for a fixed and known period of time (1 month).



I'm not sure I understand their position but in any case I am looking for alternative methods to do the same thing.



Will I be able to get what I think is called a 'closed bridging loan' from another bank or lender for this purpose?


In message , Claudio Potenza writes

Yes but it will be expensive, it might be cheaper to live in a hotel.

Its not unreasonable for egg not to do this. They lend cheaply. The computer makes the decisions. The staff cant make decisions. So you are paying for the service you get.

Could you get the vendors to give you access to the property after you have exchanged contracts to enable you to do the work? You would have to pay the deposit though.

OR, if you dont mind, please tell us your salary and the sale price of your existing house and the amount of mortgage outstanding.

I think you are underestimating the difficulties in neatly lining up completion dates and so forth, and it might also give you an issue buying, since not all sellers are going to be keen to have their completion date fixed until the entire chain is fixed. As someone else posted, a simpler and cheaper solution might be just to buy the house you want, and then live in a hotel, B&B, or even caravan on the premises, whilst redecorating. That would also be more flexible in case your DIY took longer than you expected, you wouldnt have a definitive deadline to work to. You could put your stuff in storage in the meantime.

Then try it and see. Interesting if there are say 6 or 7 in the chain and you are in the middle.

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