Trading Up - Funding deposit from equity

misemoi

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196
Like a lot of people we have become reacquainted with our living space in recent months. We always had an eye on trading up for more space, but due to overpaying our mortgage we have limited savings for a deposit, so this was a five year plan. I have just seen a house we very are interested in that we could move into immediately as it is ready to go.

I already approached our current mortgage lender UB to see what our options were and with them we would need to sell and get in a chain. Does anyone have any recent experience of this with any other lenders where they were able to release equity from PPR to fund a deposit? We have sufficient equity and income levels to support the new house cost, but it's the gap between selling and buying that is the issue.

Selling first and renting isn't really an option right now in Dublin, and as we have (fingers crossed!) school going kids, we have to stay in our locality. No options on borrowing cash even short term from friends/family.

Thanks in advance for any assistance.
 
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Brendan Burgess

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42,166
OK

Switch your mortgage to one of the other lenders and try to borrow more.

First Ireland or ICS would be the best chance.

Go to a mortgage broker who will maximise your chance of achieving this.

Be aware, that buying a house before selling your own is risky at any time, but especially risky in the current economic circumstances.

Brendan
 

Brendan Burgess

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42,166
And put your own house on the market immediately.

You might be able to sell it before the other is sold.

And your offer on the other house might not succeed anyway.

Brendan
 

RedOnion

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Hi,

You might clarify.

Is it just the deposit that's the issue?

As in, if you had the deposit, would you be able to get a mortgage for the new house without a condition that you'd have to sell the existing house first? Do you have enough income to support both mortgages?
 

tracer900

Registered User
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We're not in a too dissimilar boat here and working through it.

If you can fathom it, the goal is to buy and sell simultaneously with the ideal outcome being closing both sales on the same day.

You'll need a booking deposit available to secure the sale agreed status on the home you are buying.

If all goes to plan it is possible to do it, engage a good solicitor who can help you through it.
 

misemoi

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RedOnion, looking at it, we would not be able to cover both houses on current salaries - potentially possible if we had an exemption and could present our case that the exemption would be short term but clearly those aren't happening right now. So a chain or wait and save more are our options it seems. Thanks for the input all.

Just as an aside, the house we are interested in is a receiver sale. Would this mean they would be more or less likely to accept an offer based being in a chain? I would have thought that as the seller isn't funding another house from it then it might be more acceptable than someone needing equity for a new purchase.
 

Leo

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the goal is to buy and sell simultaneously with the ideal outcome being closing both sales on the same day.
I've been looking in south Dublin for a while now, we had to re-work the mortgage approval to base it on keeping and renting the current home. Any of the agents on properties I was interested in would not even accept bids from anyone in a chain.
 

misemoi

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Interesting Leo. I assumed it would be difficult to get a bid accepted with a chain. I have only spoken to UB and we didn't go into detail on potentially renting. Which banks are open to considering keeping and renting without a rental history? Not massively keen on being landlords but would certainly consider it to get us over the line and would aim for a short term rental on AirBNB or something like that, aimed at a family like ourselves I guess! Also curious to know if anyone has ever had to pay income tax on this income?

It appears we would need to seek a mortgage broker in any case. Thanks all.
 

Leo

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Not massively keen on being landlords but would certainly consider it to get us over the line and would aim for a short term rental on AirBNB or something like that, aimed at a family like ourselves I guess!
They won't hold you to it, you could put your house on the market when you finalise a deal on the new house, and just commit to a closing date after you close on the new place.
 

tracer900

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I've been looking in south Dublin for a while now, we had to re-work the mortgage approval to base it on keeping and renting the current home. Any of the agents on properties I was interested in would not even accept bids from anyone in a chain.
We found 2/3 properties from a particular EA that we liked prior to beginning this process.

We've since engaged that EA to sell our home, that has helped cement our position as serious buyers with that EA who can present us in a better to light to their vendors.

We've just received an offer of asking price on ours today after 2 suitors went back and forth but we will wait it out a bit longer to see how it shakes out before going sale agreed.

We've an offer in on a property and while we obviously aren't as appealing as someone who isn't in a chain, we're likely going to be selling to first time buyers which reduces some of the hassle involved.

I'm surprised there has been a point blank refusal to accept an offer, though I'm sure the location has a lot to do with it.
 

Leo

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I'm surprised there has been a point blank refusal to accept an offer, though I'm sure the location has a lot to do with it.
I suspect that's a large part of it too, in a busy area they don't want to wait. We also thought being contracted with an agent might help when viewing other properties they were listing, but the area we're looking in is served by a different branch, and it didn't make any difference to them.
 

tracer900

Registered User
Messages
15
By way of an update here we have accepted an offer on our home & had an offer accepted on our new home on Friday.

Have a handful of calls to make tomorrow morning to get the ball rolling but so far so good. Achieved 10k over asking on our own, and also paying 10k over asking on the other.

I'll try keep this updated with our experiences for others going through the same process.
 
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