Home loan for difference between house you want to buy and the house you want to sell

[AirWolf]

You are staying in house A, that you want to sell. You are looking for a house B that you want to buy. Can you get a bond for the difference (cost of B > A), with a valuation and guarantee of proceeds (from A) to financial institution providing the loan?

Salary won't qualify for full price of B, but will for difference, as A is fully paid up.

 

[Grubscrew]

So basically you want to use the full proceeds from selling house A as a deposit on house B and get a bond for the rest?

Just make your offer to purchase subject to the successful sale of House A for X amount of Rand.

 

[Rocket-Boy]

Also you would then be using the amount from house A as a deposit so use that in your application but inform them its subject to the sale of house A.

 

[biometrics]

You'll apply for the bond not the value of the house. I.e. B-A.

 

[ToxicBunny]

It will be tricky, but the bond will be subject to the sale of house a for x value to be used as a deposit for the purchase of house b

 

[Wyzak]

You are staying in house A, that you want to sell. You are looking for a house B that you want to buy. Can you get a bond for the difference (cost of B > A), with a valuation and guarantee of proceeds (from A) to financial institution providing the loan?

Salary won't qualify for full price of B, but will for difference, as A is fully paid up.

It's unlikely that you will get the loan. Your best chance will be to sell A, rent for a few months and then buy B if it's still available.

Interests rates are on the up, you don't want to buy a house now if you can only barely afford it.

 

[AirWolf]

Thanks for the suggestions. The timing will have to be just right.

How effective are fixed interest loans?

 

[Wyzak]

It depends on the rate at which you can fix it and on the market conditions. The banks will probably only fix it for a few years to protect themselves from something really crazy so it's probably not worth your while either.

They will offer to fix it at the non-fixed rate + a few percentages. So you will have to weigh it up, but chances are it's not worth it.

 

[AirWolf]

Any chance of a financial institution taking house A as collateral?

 

[IzZzy]

Thanks for the suggestions. The timing will have to be just right.

How effective are fixed interest loans?

This is not unusual in any respect. Fairly typical tbh.

Best position for a bank is to have a mortgage bond over an asset that is worth way more

 

[IzZzy]

Any chance of a financial institution taking house A as collateral?

They can't take collateral on something you no longer own, or am I missing something?

Your loan would only be for the difference between B and A. The difference in the purchase price of B you would settle in cash from the sale proceeds you receive from A.

 

[Wyzak]

Any chance of a financial institution taking house A as collateral?

No zero chance. You are selling that house so they would't be able to take it back should you default.

 

[AirWolf]

What I meant with the collateral thing is take ownership (before house is sold) as such, to speed up the transaction...

 

[Wyzak]

What I meant with the collateral thing is take ownership (before house is sold) as such, to speed up the transaction...

No, a home loan is a 20 or 30 year thing. They won't make decisions based on something that you don't intend to own six months from now.