Best option to use mortgage-free home to buy new house?

Hi, sorry if this is covered elsewhere.

We fully own our current house, valued circa 160,000 euro. A house is coming on the market valued circa 210,000 that we would like to move into. We can subsequently sell our existing house. We have savings of approx 30k that we can draw on.

What would be the best way of going about the new purchase (mortgage, remortgage, bridging loan, combinations etc) considering the price could rise to 300k

Thanks in advance!

Here's a recent thread on the topic.


Bridging finance isn't available in Ireland.

You could get a mortgage, and then use the proceeds of sale of your house to pay down a bug chunk of it. However, as you don't have 20% deposit, you'll need exemption to CBI rules. It might not be difficult to get if everything else is positive in your financials, but you'd need to check with the banks.

thanks. i could get 20% deposit if absolutely required. how might that change things?

Your best strategy is to put your house on the market now.

If you get contracts exchanged on your own home, a lender is more likely to grant you a mortgage on the new property.

Brendan

MidlifeCrisis said:

thanks. i could get 20% deposit if absolutely required. how might that change things?

Click to expand...

Doesn't really change anything, except make it easier to get a mortgage.

Unless you want to sell your house first, or try line up to close sale & purchase the same day, you best option is to get a mortgage financing for new house. Then put your on the market, completely separately, and whenever you sell use the proceeds to pay down mortgage.

You can tell the bank you intend to keep it as a rental if you like. They won't have much interest in issuing a mortgage that might be 90% repaid in a few months.

To give a rough idea of how easily you might get mortgage: What's the combined household income, how many dependents, and age of the oldest borrower? And is either borrower on Covid supports of any description?