financing house purchase

[potiche]

How does it work? Our mortgage free house hasn't sold yet but we need to secure the one we want to move to. A buy to let mortgage has been suggested. Talk me through this? Do we need the 25% deposit in cash extra to what we can borrow from the house security?

[vallaw]

Surely what you need is a bridging loan?

[redcrx]

or just a mortgage on the new one until you can pay it off?

[bednobs]

but you are not going to let it, you are going to live there!
BTL mortgages tend to have a higher rate on them
Yes if you want a mortgage you will need a deposit.
Have you thought about reducing the price for a quick sale?

[potiche]

Bridging is too risky as we don't have a buyer. Income is too low to get a mortgage for the new one.
In theory, we might be letting the old one if it doesn't sell but fingers crossed we will only need to release the equity from the old one to secure & buy the new and then be mortgage free again when the old one eventually sells.
No finance experts out there?

[buildersmate]

I have done this before by borrowing against the security of the existing property (that has no current mortgage). But doing this may be an issue if your income is very low. Try it.

[davidbrt]

You dont need a buy to let mortgage. You can either raise the shortfall finance on the existing unencumbered property but it will probably be easier to simply finance the new purchase, obtaining a mortgage that you can redeem without penalty - that way you can redeem it on the sale of the previous property.