Mortgage on new house under specific (odd) conditions

T

THE_Chris

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Hi all, first post, longtime lurker.

My mortgage situation is weird.

8 years ago I bought an apartment up the country and obviously took out a mortgage on it. Due to various management company related reasons (which I can't go into really for legal reasons) I am selling to the majority owner of the apartment block and not to a private buyer via an estate agent. Of course I'm using my solicitor. Contracts etc were signed by both parties in 2019 and deposit was paid but the buyer has failed to complete. I am suing for specific performance which is now very important due to the anticipated drop in house prices. However, thats just background and due to the legal action I can't really discuss further. But its with my solicitor anyway.

What I'm asking on here is about mortgages, because I would like to buy a house where I currently am and the fact that I can't get the money from the sale of my apartment for likely many months is troublesome. I'm in the very lucky position where I have only about 10k of my mortgage to pay off and I have a 30 year term so can just pay off the monthly payments for now, which are very small. But in a month or so I'll be able to pay off the 10k. Thats my question. Should I? I want to get rid of the mortgage, yes of course, but would there be any way of topping up this mortgage to buy a house somewhere using the apartment as some bizarre temporary collateral/deposit?

Or the more logical option: would it be better to just pay off this mortgage and be done with it. And then, would any bank allow me to take out a new, bigger mortgage to buy a house now, knowing that we are just waiting on the purchasers to pay me the money, or (possibly) get told by the court to do so under specific performance?

Does anyone else have any ideas how to get out of this rut? Or do I really have no choice just to wait it out until the legal action gets sorted and I get the money from the sale of my apartment which I can use as a nice big deposit.

At the moment, I'm a bit stuck. Mortgage + rent would be expensive for anyone.

Thanks!
 
Hi Chris

Welcome to Askaboutmoney.

I think that you need to go to a mortgage broker who will present your case in the best possible light.

I think it is unlikely that they will accept the current apartment as security, given that it's subject to a legal battle.

How much is the house you want to buy?
What is your salary?
Do you have any money for the deposit?

Brendan
 
Thanks.

I don't have a house I want to buy yet (I deliberately haven't looked because I can't buy and I can't get into a chain as I'd end up collapsing it) but lets say the apartment was worth about €270k late last year, I'd want to buy something for €350 - 400k as of last years prices. I have no money for a new deposit as I've been aggressively paying down the mortgage. I could of course get the mortgage sorted then start to save for a new deposit but that'll take time.

Salary roughly €75k, public sector, no dependents. The (400 - 270)k mortgage would be affordable if I got to that stage!
 
You will need 20% deposit for the next purchase. You should likely stop your overpayment and start saving toward this deposit.
 
Thanks folks....

A 20% deposit will be extremely hard to raise... well, it'll take time anyway. I might try a broker, see if they can suggest anything. Got word today that due to the Covids, court date for specific performance is December 2020. Lord above. All because someone decides they aren't going to pay.
 
Well, if anyone wanted a quick update -

The majority owners who I sold the apartment to, themselves sold their entire stake to an investment company. My apartment must have been a thorn in their side as they finally paid up, 15 months after we signed the contracts. I am GUESSING they are going to flip my apartment to the new investment company too and make a few quid. I investigated and it was not worth me cancelling all the legal action and selling to the new investment company. Also it would have been a legal nightmare.

I received my money, with a bit of interest, and all legal costs paid, so a happy outcome. Took 15 months and likely took more than that off my life through stress!!

Incidentally the investment companys plan is to rent to Dublin City Council and I imagine the place will go to rack & ruin. Such a shame as they were nice apartments. But anyway, not my problem anymore, in the nicest possible way.
 
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