Buying a house, but loan approval subject to selling existing house

Hi King

Thanks for the update.

Can you clarify.

Which bank are you with at present who refused to give you a new mortgage?

Have the other banks approved you at this stage?

Brendan
 
Hi Brendan,

I'm currently with Ulster Bank so I don't think that they'll be giving me a second mortgage? The broker did not clarify who refused me but he did say that they only deal with the 7 main banks. By a process of elimination I suppose PTSB and EBS did not feature in our conversation. The main runners are:

BOI
ICS
KBC
AIB

At this stage I have not had an official approval (as in a letter from a bank with mortgage approval) as we are still in the process of collecting and submitting paperwork and I need to pick a bank that we'd like to go with. I am awaiting on one or two more bits of paperwork so that I can submit and he said that we're done and dusted.
 
Should I fix my current mortgage as its on a variable rate? Or move to a better rate considering the current pandemic? The amount left on it is just over E100,000.
 
Just an update here. We have sale agreed on a property. Engineer is viewing house etc. As mentioned above the mortgage is subject to the rental of my current home but I feel that I would rather sell my current house eventually. When can I notify my solicitor that I want to sell so she can request paperwork for my current house from the bank? I want to shift this property asap but understand that it may not be possible until I have drawn down the mortgage for the new property. Thanks.
 
kingvagabond said:
Just an update here. We have sale agreed on a property. Engineer is viewing house etc. As mentioned above the mortgage is subject to the rental of my current home but I feel that I would rather sell my current house eventually. When can I notify my solicitor that I want to sell so she can request paperwork for my current house from the bank? I want to shift this property asap but understand that it may not be possible until I have drawn down the mortgage for the new property. Thanks.
Click to expand...

King, I can't answer your question but I am in a similar situation to you albeit a few steps behind. Is the bank asking you to have your current property rented prior to being able to drawdown on the new mortgage? i.e. Tenant has to be physically in the property?
 
Dublinbay12 said:
King, I can't answer your question but I am in a similar situation to you albeit a few steps behind. Is the bank asking you to have your current property rented prior to being able to drawdown on the new mortgage? i.e. Tenant has to be physically in the property?
Click to expand...
no they haven't asked for anything yet. I think they may look for evidence of rental payment - via a note from a local auctioneer confirming how much the property can get per month. Not sure though. Just in the middle of the process but would like to start thinking of shifting my current property (if possible) or if not then need to arrange to rent it. I'm trying to mitigate my losses. I don't want an empty house for a few months etc.
 
kingvagabond said:
no they haven't asked for anything yet. I think they may look for evidence of rental payment - via a note from a local auctioneer confirming how much the property can get per month. Not sure though. Just in the middle of the process but would like to start thinking of shifting my current property (if possible) or if not then need to arrange to rent it. I'm trying to mitigate my losses. I don't want an empty house for a few months etc.
Click to expand...

King, I actually can answer your question! I recently sold an investment property, I only engaged with my solicitor once the property was sale agreed. So I assume, you will need to have the property on the market first.

There are a couple of moving parts for you not withstanding the current 6 week lockdown. If you are now sale agreed, you are probably ~12-16 weeks away from getting the keys? This will vary on the type of property, any requests the sellers are making for vacating the property.

If you put your property on the market now, it depends again on the location, price etc, have you any indication how fast it would sell? For example, a house close to me went sale agreed in October in ~5 days, but there others that have been hanging around. If it takes 6 weeks to go sale agreed, and 12 weeks to go to completion.

It is likely you will have a period were you are paying the mortgage on your current property and the new property. I assume this would be the same if you rented, by the time you move out, sort the place out and get a tenant etc.

In my situation, I am budgeting for 3 months of duplicate mortgage payments.
 
kingvagabond said:
When can I notify my solicitor that I want to sell so she can request paperwork for my current house from the bank? I want to shift this property asap but understand that it may not be possible until I have drawn down the mortgage for the new property. Thanks.
Click to expand...

Is the existing mortgage with the same lender you are using to fund the new property? If not, there's nothing stopping you doing that now, bearing in the advice above about how long the overall process may take. If it's the same lender just be careful that any move you make won't affect your ability to draw-down.

There isn't a lot of property on the market right now, and all property services are permitted to continue during the current lockdown, so if it's an in-demand property, it might move quickly.
 
Dublinbay12 said:
King, I actually can answer your question! I recently sold an investment property, I only engaged with my solicitor once the property was sale agreed. So I assume, you will need to have the property on the market first.

There are a couple of moving parts for you not withstanding the current 6 week lockdown. If you are now sale agreed, you are probably ~12-16 weeks away from getting the keys? This will vary on the type of property, any requests the sellers are making for vacating the property.

If you put your property on the market now, it depends again on the location, price etc, have you any indication how fast it would sell? For example, a house close to me went sale agreed in October in ~5 days, but there others that have been hanging around. If it takes 6 weeks to go sale agreed, and 12 weeks to go to completio

It is likely you will have a period were you are paying the mortgage on your current property and the new property. I assume this would be the same if you rented, by the time you move out, sort the place out and get a tenant etc.

In my situation, I am budgeting for 3 months of duplicate mortgage payments.
Click to expand...
Yes I was thinking along the same lines myself. It's just can the solicitor request the paperwork from my current mortgage bank despite knowing the new mortgage is on the grounds that I rent my current property? That's the big question. I'd like to be able to discuss with my solicitor but if she sees that the mortgage for the new property is based on the fact that i'll rent the current one then will she say 'there's an issue here you cannot draw down the new mortgage as you planning to sell your current home'?. I know you are saying wait till you go sale agreed and perhaps that is the only alternative I have now and as you say just pencil in a few months extra mortgage with the house empty.
 
Leo said:
Is the existing mortgage with the same lender you are using to fund the new property? If not, there's nothing stopping you doing that now, bearing in the advice above about how long the overall process may take. If it's the same lender just be careful that any move you make won't affect your ability to draw-down.

There isn't a lot of property on the market right now, and all property services are permitted to continue during the current lockdown, so if it's an in-demand property, it might move quickly.
Click to expand...
No the current mortgage is with a different lender. It's just would the solicitor call me out on it and say'look you cannot draw down your new mortgage as the terms and conditions say you need to rent your current property not sell it like you are intending to do.' Should I just wait until I draw down new mortgage and signed contract before engaging my solicitor to sell my current home?
 
kingvagabond said:
It's just would the solicitor call me out on it and say'look you cannot draw down your new mortgage as the terms and conditions say you need to rent your current property not sell it like you are intending to do.
Click to expand...

No, the mortgage itself won't contain any such conditions, so you will be free to sell it when the time comes. Your solicitor should have no issues, but no harm let them know what you're thinking.
 
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