Moving house - can anyone help an idiot?!

snidget

Hello all,

I'm hoping someone might be able to give me some advice around moving house - as I'm entirely clueless.

We bought our current place 3 years ago on a 100% mortgage (well 95% mortgage and 5% loan) of £192,500. Had it valued today and we've made about £5 - 7.5k profit. We're looking at places for about £230,000.

So, a list of questions:
1 - would we have to put down a deposit to increase our mortgage?
2 - I'm assuming about £7-10k in fees, but do I need to have this money or can it be built into the mortgage cost
3 - other than stamp duty, conveyancing and estate agents fees, am I missing any costs?

I'm sure there's lots more. But I suppose that's a start - if I have to find £10k upfront in fees it won't be an issue anyway!!!

Thank you:o

hzcmar

Aside from any of the fees, you'll struggle to get anything more than a 90% mortgage, so that's £23k deposit needed.

Who valued it? An estate agent? Have you checked zoopla or anywhere to see if houses in your area are actually selling for that amount?

G_M

1) You'll be applying for a new mortgage, which will require a deposit. The % depends on the lender.
2) £7-10L fees? What?! I can only assume you mean EA selling fees and/or stamp duty on the purchase? Again, you need to find out what % of the purchase price your chosen lender will offer you. Whether you spend all of this on the purchase, or use some of it on 'fees', is up to you.
3) yes. Lots.

snidget

See, you've immediately highlighted the big problem!

I assumed that if I've had my mortgage for a while, been good payers etc, borrowing more would be OK on top of it. So does it start like a new mortgage all over again?

chambta

snidget wrote: »

See, you've immediately highlighted the big problem!

I assumed that if I've had my mortgage for a while, been good payers etc, borrowing more would be OK on top of it. So does it start like a new mortgage all over again?

It would be a new mortgage, yes. Perhaps with your existing mortgage 'ported' to the new property.

But you would need to be approved to increase the lend, subject to income and credit scoring etc AND have the cash in the bank to cover the cash deposit.

Plus you'll need to sell yours of course.

G_M

Plus valuation on the new property to make sure the lender is confidant it's worth what he's lending you!

Meatballs

snidget wrote: »

We bought our current place 3 years ago on a 100% mortgage (well 95% mortgage and 5% loan) of £192,500. Had it valued today and we've made about £5 - 7.5k profit. We're looking at places for about £230,000.

You haven't made any profit until you've sold it. That 5-7k can quickly be eaten in to with negotiations, if suveryor finds issues, etc.

snidget

Thanks everyone.

Obviously the numbers are based on if ours sells and is approved to the amount we market for, and if the new property is worth what we pay.

But if I have no chance of getting a mortgage increase, it's all academic anyway.

I just thought once I was on the ladder, it was supposed to be easier to move up it. If I need to find a deposit all over again I may as well be a first time buyer:eek:

Thanks so much for your replies

TOBRUK

snidget wrote: »

Hello all,

I'm hoping someone might be able to give me some advice around moving house - as I'm entirely clueless.

We bought our current place 3 years ago on a 100% mortgage (well 95% mortgage and 5% loan) of £192,500. Had it valued today and we've made about £5 - 7.5k profit. We're looking at places for about £230,000.

So, a list of questions:
1 - would we have to put down a deposit to increase our mortgage?
2 - I'm assuming about £7-10k in fees, but do I need to have this money or can it be built into the mortgage cost
3 - other than stamp duty, conveyancing and estate agents fees, am I missing any costs?

I'm sure there's lots more. But I suppose that's a start - if I have to find £10k upfront in fees it won't be an issue anyway!!!

Thank you:o

Hi Snidget, I'm in the process of selling my house and buying another. Before I put my house on the market I checked if my mortgage at that time was 'portable', which it wasn't and the lender did not have that facility! I had to change lender to get a 'portable' mortgage - which had a fee. I also had to increase my mortgage so that was treated as a new mortgage - with a product fee of around £200! They find fees and charges for you to pay!

I would think that you need to see you mortgage lender to see whether they are willing to increase your mortgage - before you look at properties, as you may not be able to afford the properties you are presently looking at.

My fees are around £6,600 in total (but yours may be more), and whether you can put it on your mortgage will depend on your mortgage limit - if you want to spend up to your limit on the loan you are allowed, you would then have to find the buying and selling costs yourself.

As for your £5 - £7.5k profit, don't be surprised if you make a loss, you may get an offer under £10,000 or more of asking price, which is quite common especially in the current climate.

I think you need to check what your lender is willing to increase you loan to before you do anything else. Also, get about 3 valuations from estate agents before you chose one - some change more than others. I am paying 1.5% plus VAT on sale of the house. I got a mortgage broker to check the best mortgage I could get - you don't have to use you current lender, shop around.

TOBRUK

snidget wrote: »

Thanks everyone.

Obviously the numbers are based on if ours sells and is approved to the amount we market for, and if the new property is worth what we pay.

But if I have no chance of getting a mortgage increase, it's all academic anyway.

I just thought once I was on the ladder, it was supposed to be easier to move up it. If I need to find a deposit all over again I may as well be a first time buyer:eek:

Thanks so much for your replies

You need to work out what you can afford - work out what is the lowest you can sell yours for (the lowest OFFER you would be able to accept on your property) to enable for you to buy another property. It's a lot of number crunching I'm afraid!

sonastin

The notion of the "ladder" making trading up easier is based on 2 assumptions:

1) you'll have paid off a proportion of your mortgage by the time you come to move. In the early years, most of your repayments go on interest but after a while, the initial loan starts to go down noticably. 3 years in is a bit too soon for your repayments to have much of a visible dent.
and here's the big one...
2) property will increase in value so that by the time you come to sell, you'll have loads of equity to put down as a deposit on the next place...

You've been caught out by no.2. Property is no longer increasing in price at a stupid rate - in most areas of the country it is falling or at best stagnant. Some places are showing small rises but nothing like the rate that you'd need to be ready to trade up so soon.

If your circumstances have improved - e.g. if you've had decent payrises in the meantime - lenders might be willing to loan you more now than they would first time round but you would still need to put in a decent chunk of cash yourself as a deposit. As lending criteria has tightened since you bought, not only do you need a bigger deposit because the house is more expensive but you also need a bigger % of the higher value of the next house. I know it seems like a double-whammy but its because lenders gave away money too easily at the time you were buying.