Hi all
First post here.
Mother in law previously gave us a gift of €100k to enable us to move house. We then got AIP for €250K. We currently have a house worth €300k and we will release approx. €90K equity when we sell. MIL has now offered us a loan of €x amount to buy a house with cash (in effect a "bridging" loan). We are looking at spending €370K on the new house.
What we would like to do, is use MIL loan to buy new house outright, keep our current home for another six months (or however long it would take for our prospective new home to complete) to avail of the fact that prices are rising, and then sell current home and draw down a mortgage on new home (which we would have already bought with MIL's cash) in order to pay back mother in law (bank won't let us run two mortgages at the same rime).
In a quick phonecall to ask, the mortgage broker told me that that the bank (H@ven) won't allow us to raise a mortgage on a house we will have bought for cash for the purpose of repaying MIL, he said banks will only allow a mortgage on a new home for the purpose of home improvements. Is this right in this circumstance? Are there other ways around this?
The other option is using the MIL loan to pay off our existing mortgage - but then we lose the unique opportunity to secure our new home using the element of being a true "cash buyer" as a bargaining chip (we keep losing out on houses to cash buyers).
Are there any other options here that I'm just not thinking of? I feel we are in an incredibly lucky position but are getting stumped at every turn.
Thanks in advance!
First post here.
Mother in law previously gave us a gift of €100k to enable us to move house. We then got AIP for €250K. We currently have a house worth €300k and we will release approx. €90K equity when we sell. MIL has now offered us a loan of €x amount to buy a house with cash (in effect a "bridging" loan). We are looking at spending €370K on the new house.
What we would like to do, is use MIL loan to buy new house outright, keep our current home for another six months (or however long it would take for our prospective new home to complete) to avail of the fact that prices are rising, and then sell current home and draw down a mortgage on new home (which we would have already bought with MIL's cash) in order to pay back mother in law (bank won't let us run two mortgages at the same rime).
In a quick phonecall to ask, the mortgage broker told me that that the bank (H@ven) won't allow us to raise a mortgage on a house we will have bought for cash for the purpose of repaying MIL, he said banks will only allow a mortgage on a new home for the purpose of home improvements. Is this right in this circumstance? Are there other ways around this?
The other option is using the MIL loan to pay off our existing mortgage - but then we lose the unique opportunity to secure our new home using the element of being a true "cash buyer" as a bargaining chip (we keep losing out on houses to cash buyers).
Are there any other options here that I'm just not thinking of? I feel we are in an incredibly lucky position but are getting stumped at every turn.
Thanks in advance!