Do we need a deposit?

mattpearce79

My wife wants some re-assurance that we don't need a deposit!

We are selling our house £90'000 Part-ex, our mortgage is £44'000 remaining and that leaves us with £46'000 profit.

The new property we are buying is £159'000 and would mean us taking a new mortgage for £112'000.

So does that mean the the £46'000 made on the part-ex, can be used as our deposit?

Premier_2

Yes it can

But... there's always a 'but' isn't there.

When you exchange contracts, which is usually a few weeks before completion, you are typically asked for 10% deposit. The good news is that you can use the 10% deposit that you will receive on the house you are selling to fund some of that, but that's only £9,000. You may be asked to place £15,900 down on the new property - a shortfall of £6,900.

The good news is that a decent solicitor may negotiate down the deposit paid on the house you want to buy so that you don't need to find the extra cash - no guarantees, but it is often achieved when you are not actually putting any cash savings into the new property.

Just a word of caution - if for some reason the sale doesn't complete after exchange, you would still owe the seller the 10% even though your solicitor had negotiated the actual deposit down.