Hey guys, I just wanted to ask something. If you want to buy a new house and you buy it, get it built etc, and you want to sell your old house to pay for the new one and the house doesn't get sold, whats the worst case scenario? :S
option 1 : u chuck the deal for new house, as u do not have cash to buy it. option 2 : loan for new house till old one is sold
Option 3, if you default on the agreement to purchase the new house, you may lose your deposit, and face the possibility of being sued, and may have your credit score reduced.
how much equity do you have on your current house, and how much are you'r current mortgage payments? Chances are you wont get a loan on the new house unless the broker thinks you can afford it. Judging from your post, you cant.
if there's no other way for you to secure the house (place a deposit) I'd suggest that you buy the house after you get rid of the old one.
The best way is to have the money for the new house, buy it move there, fix up the old one, and after that try to sell it. I know problogger sold his house recently and gives out some advices about this.
My biggest advice would be to sell your house before building or buying a new one. Even if that means moving into a small cheap place for a short period of time. Sacrifice now, benefit later is my motto. Assuming you have the cash to buy a second house, the worst that could happen is you are stuck paying two mortgages and insurance until the old house gets sold.
Check your purchase contract for the new house. It should have a clause about what happens if you don't qualify for a loan (forfeit deposit or get deposit returned to you). You may be able to get your deposit back for the new house if that part of the contract is written in your favor.
make the contact after you are sure that you can have your old house sold,or you can give the saler your old house as part of the payment.DO NOT MAKE ANY PROMISE THAT YOU CAN NOT REACH.