Selling Questions...

thefair1973

HI All, Just sold our house on Monday and have a few questions, seeing as I've only ever bought as a FTB before:
1. Assuming I can use equity in my current home as deposit for a new one?
2. Can I use equity in my current home to pay stamp duty?
3. Can I borrow more to pay stamp duty?

Stampt duty is going to be circa £14k so an amount I dont currently have lying around, especially given selling and other buying fees.

Thanks

Doozergirl

You need to answer some questions before we can answer properly.

What price are you selling for?

How much equity does that leave you with?

How much are you buying again for?

How much of a mortgage can you get?

thefair1973

What price are you selling for?
£225,000

How much equity does that leave you with?
£125,000 (ish)

How much are you buying again for?
£435,000

How much of a mortgage can you get?
£380,000

Those numbers seem rather large written down!!!

Doozergirl

They are large!

Yes you should be able to do what you want.

You need to work out what all your fees and SDLT will be and subtract this from your £125,000 equity. That will be your deposit. Make sure it's at least the right % of your new house that you need to satisfy the mortgage co (eg. 15% deposit). Then you borrow the purchase price minus your new deposit.

That will leave you with 'change' which your solicitor will use to pay the bills.

thefair1973

So, if I wanted, I could take £15k out of the equity to pay stamp duty and say I have a £110k deposit? That's a result, as I was beginning to wonder where this massive stamp duty payment was going to come from.

The Governemnt have been very clever over the years, not moving the stamp duty thresholds in line with RPI so more and more purchases fall in to the higher bandings. Mad when I think stamp duty on my current house was £1700 and this one is going to be over 13 grand!!!

Doozergirl

Yes.

To be fair, I think your new house will have been in that 3% bracket for some time.

I made a rule for myself never to buy into the 3% SDLT bracket. It's money you never see back. I've sold houses waaay over that threshold and sometimes into the next one, but have never yet paid 3% SDLT when I've bought them .