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  • FIRST POST
    • Spies
    • By Spies 17th May 17, 2:09 PM
    • 66Posts
    • 32Thanks
    Spies
    Feasibility of moving into a new build in 2018
    • #1
    • 17th May 17, 2:09 PM
    Feasibility of moving into a new build in 2018 17th May 17 at 2:09 PM
    I purchased a house back in October 2014, I paid £150k, I put down £72k and borrowed £78k, I have £68k left on my mortgage. This is costing me £355 a month on capital and interest.

    There are new build homes being constructed in my area at the moment, I wish to work out the feasibility of moving into one of these in 12 months time when the next phase of development starts.

    The house builder in question will purchase my current house from me at its market value and as long as it doesn't exceed 2/3 of the cost of the new house, the new builds are also eligible for Help to Buy.

    I'm not sure how the whole part exchange thing works with house builders (or do they all do it differently?), does money actually change hands?

    Given the information above, would a £250-£300k house be a possibility?
Page 1
    • DumbMuscle
    • By DumbMuscle 17th May 17, 3:18 PM
    • 138 Posts
    • 150 Thanks
    DumbMuscle
    • #2
    • 17th May 17, 3:18 PM
    • #2
    • 17th May 17, 3:18 PM
    We don't have nearly enough info to judge yet! Where is the house (which will affect how much house prices have moved)? Do you have any other funds you can use towards the purchase? Did you borrow as much as you could, or is there a possibility of taking on a larger mortgage?

    HTB equity loan will give you 20% of the purchase price (assuming this is outside London), so you'd need to raise £200k-£240k from the sale of your house, your own savings, and any additional borrowing, as well as paying all the fees involved in the sale/purchase. For a £250k new build, your house can contribute at most £163k of that in part exchange, so you're going to need somewhere over £40k more from somewhere.

    You may also have early repayment fees for your mortgage to worry about, if it's not portable.

    You also need to work out how the builder determines "market value", and whether it's worth commissioning your own survey to get a better estimate, or even putting it on the open market to get a better price.
    • Spies
    • By Spies 18th May 17, 1:27 PM
    • 66 Posts
    • 32 Thanks
    Spies
    • #3
    • 18th May 17, 1:27 PM
    • #3
    • 18th May 17, 1:27 PM
    I took the maximum I could at the time, in fact I had to take a 26 year mortgage to get the amount I needed. I put all my savings into the initial deposit for the house.

    The area is the South Lakes, but not within the Lake District itself, I don't currently have any savings but I am starting to save now, by this time next year I should have around £6000.

    My mortgage is fixed until Jan 2019 which means a 1% early repayment fee will apply next year if I am unable to move it.

    The builders states that they get 2 independent valuations, that's how they arrive at the figure.

    Realistically, I think I will have £100k deposit assuming the mortgage cannot be moved, then £50k from HTB, which leaves me with an impossible task of getting £100k mortgage even though I could actually afford the repayments (I don't really have many outgoings)
    Last edited by Spies; 18-05-2017 at 1:45 PM.
    • Spies
    • By Spies 20th May 17, 1:38 PM
    • 66 Posts
    • 32 Thanks
    Spies
    • #4
    • 20th May 17, 1:38 PM
    • #4
    • 20th May 17, 1:38 PM
    I have discovered that you cannot use HTB with a part exchange so that basically puts that idea to bed.
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