Basic question

ajj81

A really silly one I know but....

I have a house with 20k equity in it
I want to sell and move to a house that costs 145k
Do I need to apply for a mortgage of £125k or £145k as I presume this 20k would be my deposit?

how does it work?

thanks

AJJ

GMS

You wiould need to borrow the difference between the purchase price and your deposit.

Keep in mind there will be costs associated with selling such as legal fees and any early repayment charges.

You will also have costs with the purchase.

ajj81

thanks, sorry if Im being a bit dim here but:

if I put my salary in (online) and my lender says they can give me 150k then I can buy a house for upto 170k (150k + my deposit 20k) correct?

thanks and sorry, but cant seem to get my head around this!!

TrickyDicky101

Yes but as already mentioned there are costs to take into account such as legal fees/ selling costs/stamp duty (potentially) etc etc so whilst in theory you may have £170k to spend on a house, after all associated costs you may well end up shelling out £180k or more.

Good luck!

ajj81

thanks guys,

I have a seperate fund for those costs but couldn't get my head around how this deposit vs lending worked!

I know all figures are rough online so next step is some firm advice!

thanks once again

AJJ

betmunch

Please dont take offence at this, but if you cant get your head round what you can buy when you add your deposit to your maximum loan then you really shouldnt be sorting this out yourself.

I would sit down with a Mortgage Broker and have them explain it all to you, theres far more to consider than just what you can buy at and, by your own admission, your stuggling with that

betmunch

We got crossed posts, glad to see you will be taking advice

Thrugelmir

You'll need to find a cash deposit , normally 10% of purchase price , when you exchange contracts to purchase the new property.

TrickyDicky101

Thrugelmir wrote: »

You'll need to find a cash deposit , normally 10% of purchase price , when you exchange contracts to purchase the new property.

That's not the case because the OP already has a house to sell. Whilst some form of deposit will be required, it is most unlikely to be at the level of £17k cash.