Do I need a mortgage or a short term loan?

[kfung]

We've got £200k deposit to buy a house worth £440k, our flat is worth £240k.

We intend to borrow the difference (£240k) and buy the house, have it totally renovated, move into the house and then afterwards sell the flat. The estimated rennovation time could be 6 - 12 months.

Do I need to look for a mortgage or a particular type of loan?:thinking:

Thanks

[rbullivant]

I think a mortgage, you might not get what you think for the flat. Can you afford the mortgage (ie 3x salary), perhaps look for something with no early redemption charges.

R

[CiderMyth]

I would say you're after a mortgage, having done similar recently. However, we only had the second mortgage for a month and a half, before we moved in and sold the old place.
Maybe look at an offset mortgage on the new house - then you put the proceeds of the flat sale in as an offsetting amount when that comes through.

[kfung]

Thanks, I was maybe thinking of an interest only mortgage but an offset mortgage makes more sense.

[neilalford]

I believe First Direct do an interest only offset mortgage, or at least, they used to as I have one!

[stephen]

I believe First Direct do an interest only offset mortgage, or at least, they used to as I have one!

That's what I had too. I wanted a repayment one but they set it up as an interest only one with a monthly standing order to pay it off.

[bollecks]

You can get bridging loans, but these tend to be designed for under 1 year, with interest rates in the 10-15% bracket.

Basically, get a mortgage!