Moving but equity from sell required for next purchase

sparrowlung

I'm selling my flat and hopefully getting a bigger place. One aspect of moving I don't understand is how to put down the equity I receive from the sell of my place as the deposit on my new place. I could see how it could work if I was selling and buying on different dates but I aspire to complete the sell and the purchase on the same day. I've heard about bridging loans but i'd rather avoid that if possible. Can anyone shed any light on how this might work?.

superjaggybunnet

A good lawyer will take care of everything for you.

Also your new mortgage provider can arrange payments all to tie up on the same day.

Bridging loans are for if you move into your new place but still have not sold the old place and need extra cash to pay both mortgages. Bridging is expensive but I think you can claim tax back.

BobProperty

The simple answer is you don't put down a deposit, everyone in the chain knows that you can't do anything until your property is sold. At the point you sell, your solicitor receives the money for your sale. Part or all of this is the deposit on your next purchase. The money gets transferred to the solicitor acting for the vendor of the house you are buying together with the drawdown of your mortgage (= purchase price). This all happens on one day (or at worst a couple of consecutive working days) when everyone completes.

silvercar

If all the chain exchange on the same day, the deposits get passed up the chain. Complete on the same day and the proceeds from the sale get passed up the chain.

Bossyboots

It will take the agreement of all the parties in the chain to waive the deposit but it can be done. If you then failed to complete, you would still be liable to forfeit the amount of contractural deposit and can be sued for this.

Then, as silvercar says, on completion day the proceeds of sale get passed up the chain.