Trading up - sequence?

D

DeeKie

Registered User
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We have a nice but small Dublin 4 bed, we’ve plenty of room to extend but just can’t face the hassle. We want to trade up by about 200k in value. Our house is probably with about 680k. We don’t know the sequence to follow. Do you sell your house and then rent while looking? Or try to do the two at the same time? Or buy and bridge if you need to? We want to stay where we are location wise. Any advice welcome as we are quite clueless. What have others done?

We are not in a great hurry we may wait and see what happens with Brexit (although that would impact on our own house cost so might be neutral enough anyway)
 
We have spotted a house that we like. Is bridging finance still a thing?
 
I would have thought if you had your homework done, all relevant documentation, permanent job/salary and live in a sellable area that you would get the finance to bridge you over short term. Then again if the OP goes into a bank or finance house and tells them that he hasn't a clue how all this works then he'll get a very polite size 9 out the door
 
Bridging finance is a thing of the past unfortunately. Unless you have family members with deep pockets to lend you the required funds you will have to close the sale of your own property before you purchase a new one.

The path of least hassle would be to put your own property on the market and try and get a quick sale to a cash buyer. Bare in mind that the people purchasing your property will more than likely be in a chain similar to yourself relying on the sale of their own property which will can delay the process.

There is no harm on you looking at houses now but you may be up against people who are in a position to close quicker than you who will obviously be more desirable to the seller. We missed out on 2 houses we were bidding on as a result of this.

A good result will be if you sell your own property 1st and have a closing date set for the purchase of the new property. Rent somewhere for 1-2 weeks while your stuff is in storage and the purchase of the 2nd property is being finalised.

I would also advise that that moving house can be a lot of hassle and is very expensive. It takes on average about 4 months and I would imagine you would need to pay costs of €30,000 (estate agents, solicitors, stamp duty, engineers, movers, valuations, short term rent) of which none will add value to the asset you are buying. Closing a sale in December is not that common as people do not want the hassle in the run up to Christmas. If you like the area you are currently in I would very much be considering doing a job on existing home.
 
Crossing with Easel but making the same points

This is a real life email sent to a client yesterday:

"The letter from the Estate Agent says - "as soon as possible"- I can close any transaction very quickly if the Vendor (you) is ready to move out and the Purchaser has funds to complete. We generally find, though, that a Purchaser is getting a mortgage and they will look for a Loan Funds Issue clause in the Contract - as in, the sale is conditional on their loan funds issuing.

It's a very standard clause and I recommend that the Vendor accepts it.

And if you're hoping to buy another property, its well nigh impossible to do the two transactions simultaneously.

You're best to close out on the sale and then, sometime later, try and complete on a purchase. There will be a gap between the two unless, by some miracle , you can close your sale in the morning and complete the purchase in the afternoon on one day.

There is no wriggle room though and one hitch in the chain will mean everything comes unstuck."

On the specific queries:
Do you sell your house and then rent while looking?

This is the least problematic save for the inconvenience.

Or try to do the two at the same time?

Really hard to do- you have too many parties, all with their own agendas.

Or buy and bridge if you need to?

I have not seen bridging finance made available since 2008- unless you have a frightfully rich relative who can write a cheque for the full purchase price and recover it if, and when, the current house sells.


mf
 
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noproblem said:
that you would get the finance to bridge you over short
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Are you aware of any bank / lender that would offer such finance, or thinking about something you saw in 2008? If you're aware of something different it'd be fantastic to hear about it because there are many people in a similar situation to the OP.

Unless OP would be in a position to fund new mortgage without having to sell current home the banks aren't in this business at the moment.

There's a possibility, if they could raise 30% deposit for new home that they buy it as an investment, and then convert to PPR as soon as they sell current home.
 
Bridging finance doesn't really make too much sense for a lender as the funds will be repaid in a number of weeks, they have a large admin obligation for a relatively small fee and if the market crashes they have taken on a certain amount of unnecessary risk.

The only way it would make sense to me were if the banks charged a large interest rate on the bridging lent in addition to a significant transaction fee. The transaction fee could potentially then be refunded if the borrower converted the bridging finance into a mortgage with the lending bank.
 
We’ve very little left on our mortgage and a big chunk in savings so we could probably do that, buy then sell. I had not thought of that but it is very possible.
 
DeeKie said:
We’ve very little left on our mortgage and a big chunk in savings so we could probably do that, buy then sell. I had not thought of that but it is very possible.
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Ah, if you're loaded that changes things!
 
Not loaded but we have a bit put by. I just thought that you would not get a short term mortgage and so this my bridging question.
 
mf1 said:
Do you sell your house and then rent while looking?
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Easel said:
Rent somewhere for...
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The renting part is easier said than done. I'm going through a sale / purchase myself - between the low number of units for rent, very high rental and minimum 12 months rental agreement in all "online lettings", it's not good for those looking to rent for a few weeks / months...
 
I'd still do up your current house. Think about it. It can't be any more hassle than moving lock stock and barrel twice. A staged upgrade over a few years should be do-able. Better the devil you know as well.
 
elcato said:
I'd still do up your current house. Think about it. It can't be any more hassle than moving lock stock and barrel twice. A staged upgrade over a few years should be do-able. Better the devil you know as well.
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I just can’t face it. We’d have to move out to do it.
 
I thought of that. Perhaps we’d explore Airbnb, corporate lets or house sitting options...
 
Yes, I personally know 2 people who have been accomodated with bridging finance, or whatever you wish to call it.
 
Great.

Will you give us the details of the provider(s), please, and everyone will have access to the information?.

And to Deekie- I think house-sitting is a good option. I've been able to offer an empty house to (only very trusted) clients in the past going through this process- both properties were following the death of two separate elderly relations where we were going through Probate and the properties were empty.

I had another situation where I put a colleague in touch with a client who had bought, but was abroad, and was happy to have the house occupied.

mf
 
One was the Credit Union and the other was AIB bank. What rates they charged I cannot give you. I do know both institutions were paid back in 6 months.
 
DeeKie said:
Not loaded but we have a bit put by. I just thought that you would not get a short term mortgage and so this my bridging question.
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You can take a mortgage (once not on fixed rate) and repay at any time. Mortgage must not exceed 3.5ish times salary and you must have 20% deposit in cash
 
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